Annual Report 2021 TABLE OF CONTENTS
OVERVIEW 01 CORPORATE INFORMATION 02 FIVE-YEAR PERFORMANCE HIGHLIGHTS 03 DIRECTORS’ PROFILE 09 KEY SENIOR MANAGEMENT PROFILE
PERFORMANCE DRIVEN FINANCIAL REPORT 13 CHAIRMAN’S STATEMENT 87 FINANCIAL STATEMENTS 16 MANAGEMENT DISCUSSION AND ANALYSIS ADDITIONAL INFORMATION 175 LIST OF PROPERTIES SUSTAINABILITY STATEMENT 177 ANALYSIS OF SHAREHOLDINGS 21 SUSTAINABILITY REPORT 179 LIST OF TOP 30 SHAREHOLDERS 181 NOTICE OF THE FIFTY-EIGHTH (58TH) CORPORATE GOVERNANCE ANNUAL GENERAL MEETING 61 CORPORATE GOVERNANCE OVERVIEW • FORM OF PROXY STATEMENT 75 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 76 ADDITIONAL COMPLIANCE INFORMATION 77 AUDIT COMMITTEE REPORT 80 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 01 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) CORPORATE INFORMATION
DIRECTORS
Dato’ Hj Zainal Abidin Putih, Chairman YM Tengku Maruan Tengku Ariff Low Gay Teck, Managing Director Chiu Andrew Wah Wai Ferdaus Mahmood Hoong Cheong Thard Dato’ Ir Dr A Bakar Jaafar Dato’ Noorizah Hj Abd Hamid Dato’ Hj Ikhwan Salim Dato’ Hj Sujak
SECRETARY CORPORATE OFFICE
Lee Siw Yeng (MAICSA 7048942) 8trium, Level 21 Menara 1 SSM Practising Certificate No. 201908001160 Jalan Cempaka SD 12/5 Bandar Sri Damansara AUDIT COMMITTEE 52200 Kuala Lumpur Tel : 603-6279 8000 Dato’ Hj Ikhwan Salim Dato’ Hj Sujak, Chairman Fax : 603-6277 7061 Dato’ Ir Dr A Bakar Jaafar E-mail : [email protected] Hoong Cheong Thard Website : www.land-general.com
NOMINATING COMMITTEE AUDITORS
Dato’ Hj Zainal Abidin Putih, Chairman KPMG PLT Dato’ Ir Dr A Bakar Jaafar Chartered Accountants YM Tengku Maruan Tengku Ariff LISTING REMUNERATION COMMITTEE Main Market of Bursa Malaysia Securities Berhad Dato’ Ir Dr A Bakar Jaafar, Chairman Hoong Cheong Thard SHARE REGISTRAR Chiu Andrew Wah Wai Boardroom Share Registrars Sdn Bhd RISK MANAGEMENT COMMITTEE (Reg No: 199601006647 (378993-D) 11th Floor, Menara Symphony Dato’ Noorizah Hj Abd Hamid, Chairman No. 5, Jalan Professor Khoo Kay Kim Dato’ Ir Dr A Bakar Jaafar Seksyen 13, 46200 Petaling Jaya YM Tengku Maruan Tengku Ariff Selangor Low Gay Teck Tel : 603-7890 4700 Fax : 603-7890 4670 REGISTERED OFFICE E-mail : [email protected] 8trium, Level 21 Menara 1 Jalan Cempaka SD 12/5 Bandar Sri Damansara 52200 Kuala Lumpur Tel : 603-6279 8000 Fax : 603-6277 7061 OVERVIEW CORPORATE GOVERNANCE 02 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) FIVE-YEAR PERFORMANCE HIGHLIGHTS
2021 2020 2019 2018 2017 ^ Operating results (RM’000) Restated Restated
Revenue 134,892 139,724 134,435 92,930 47,193 Profit before tax and interest (EBIT) 40,699 28,805 55,335 84,874 73,562 Profit before tax 38,263 26,185 52,893 80,465 69,752 Profit after tax 33,130 20,633 48,955 63,322 51,558 Profit attributable to owners of the Company 30,459 14,891 41,672 61,341 35,526
Key Financial Position Data (RM’000)
Total assets 1,637,455 1,565,643 1,540,168 1,538,684 1,108,455 Total borrowings and lease liabilities (included ICULS - liability portion) 224,363 206,810 191,892 185,700 91,736 Shareholders’ fund 1,112,933 1,080,279 1,095,283 1,098,401 656,314 Total equity 1,202,987 1,167,662 1,168,981 1,119,817 672,867 Issued and paid up share capital 660,232 660,232 660,232 651,664 272,032
Share Information (RM)
Basic earnings per share 0.01 0.01 0.01 0.02 0.03 Net assets per share 0.37 0.36 0.37 0.37 0.58 Share price as at 31 March 0.125 0.080 0.150 0.175 0.325
(‘000)
Number of ordinary shares issued as at 31 March 2,973,135 2,973,135 2,973,135 2,930,294 1,122,585 Weighted average number of ordinary shares in issue 2,973,135 2,973,135 2,952,582 2,711,446 1,108,471
Financial Ratio
After Tax Return on Equity (%) 2.98% 1.91% 4.47% 5.76% 7.86% Return (EBIT) on Total Assets (%) 2.49% 1.84% 3.59% 5.52% 6.64% Gearing ratio (times) 0.20 0.19 0.18 0.17 0.14 Price to earnings ratio (times) 12.25 16.00 10.64 8.36 10.83
^ Figure reported based on FRS framework.
REVENUE PROFIT BEFORE TAX BASIC EARNINGS PER SHARE NET ASSETS PER SHARE (RM’000) (RM) (RM’000) (RM) 134,892 139,724 134,435 92,930 47,193 38,263 26,185 52,893 80,465 69,752 0.01 0.01 0.01 0.02 0.03 0.37 0.36 0.37 0.37 0.58
‘21 ‘20 ‘19 ‘18 ‘17 ‘21 ‘20 ‘19 ‘18 ‘17 ‘21 ‘20 ‘19 ‘18 ‘17 ‘21 ‘20 ‘19 ‘18 ‘17 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 03 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) DIRECTORS’ PROFILE
DATO’ HJ ZAINAL ABIDIN PUTIH Independent Non-Executive Chairman
Dato’ Hj Zainal Abidin Putih, a Malaysian male aged 75, Dato’ Hj Zainal was awarded the Darjah Setia Negeri was appointed as Chairman of L&G on 1 June 2010. He is a Sembilan (D.S.N.S.) by the Yang Di Pertuan Besar Negeri Fellow of the Institute of Chartered Accountants in England Sembilan and the Jaksa Pendamai (J.P.) by the Yang Di and Wales (ICAEW), a member of the Malaysian Institute Pertua Negeri Melaka in 1995 and 2008, respectively. of Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants (MIA). Dato’ Hj Zainal is the Chairman of Tokio Marine Insurans (Malaysia) Berhad and sits as a Board Member of Petron Dato’ Hj Zainal qualified as a Chartered Accountant of the Malaysia Refining & Marketing Bhd and Khazanah Nasional ICAEW in 1972 and has very extensive experience in audit Berhad. throughout his career as a practising accountant. He also has a good working knowledge of taxation and has been Dato’ Hj Zainal is also the Chairman of Touch ‘n Go Sdn Bhd involved in management consulting especially those involved and Mobile Money International Sdn Bhd. He is a trustee of in acquisition, take over, amalgamation and restructuring of the National Heart Institute Foundation (IJNF) as well as a companies and company flotation. member of Frost & Sullivan’s FinTech Advisory Council. He is also a member of the Board of Trustees of Yayasan Universiti Dato’ Hj Zainal was formerly the Country Managing Partner Multimedia and an Advisor to the Advisory Board of RHL of Messrs Hanafiah Raslan and Mohamad and was an Adviser Ventures Sdn Bhd. with Messrs Ernst & Young Malaysia until his retirement in 2005. He was the President of MICPA from 1989 until 1991 Dato’ Hj Zainal does not have any family relationship with any and the Chairman of the Malaysian Accounting Standards Director and/or major shareholder of L&G and he does not Board from 2003 until 2009. have any conflict of interest with L&G. He has no conviction for any offences over the last five (5) years and has not been He has been appointed as the Chairman of the Financial imposed with any public sanction or penalty by the relevant Reporting Foundation (FRF) by the Minister of Finance regulatory bodies during the financial year 2021. Malaysia on 1 July 2021, for a term of three years. He attended eight (8) out of eight (8) Board Meetings held He had also served in Government Agencies as the Chairman during the financial year ended 31 March 2021. of Pengurusan Danaharta Nasional Berhad, a member of the Malaysian Communications & Multimedia Commission and a Dato’ Hj Zainal is the Chairman of the Nominating Committee member of the Investment Panel of the Employees Provident of L&G. Fund. OVERVIEW CORPORATE GOVERNANCE 04 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
DIRECTORS’ PROFILE
From left to right:
LOW GAY TECK Managing Director
FERDAUS MAHMOOD Non-Independent Non-Executive Director
Mr Low Gay Teck, a Malaysian male aged 56, was appointed Encik Ferdaus Mahmood, a Malaysian male aged 66, was as Director of L&G on 15 October 2007 and was redesignated appointed as Executive Director of L&G on 16 June 2008 as the Managing Director of L&G on 1 January 2008. Mr Low and was redesignated as Non-Independent Non-Executive holds a Bachelor of Civil Engineering from Footscray Institute Director on 1 January 2016 following his retirement as of Technology (now known as Victoria University), Australia. Executive Director on 31 December 2015.
Prior to joining L&G, Mr Low was with the Mayland Group Encik Ferdaus started his career as Trainee Accountant since 1996. In 2002, he was appointed Director of the Mayland with Tractors Malaysia Bhd in 1974 and joined United Estate Group and assumed the position of Managing Director in Projects Sdn Bhd (UEP) (initial developer of Subang Jaya, 2005. Mr Low has been involved in property development Selangor) in 1976 where his last position was the Credit and project management for the past 32 years, handling Controller. and implementing projects such as residential, commercial, shopping complex, hotel, golf course, condominium and Subsequently, in 1980, Encik Ferdaus made a decisive switch serviced apartments. in his career into the main stream of the property industry and since then has garnered extensive experience in this Currently, Mr Low sits on the Board of a few subsidiaries of industry especially in the areas of marketing, sales, credit L&G and several private limited companies. control and property management.
Mr Low does not have any family relationship with any In 1990, Encik Ferdaus joined L&G as the General Manager Director and/or major shareholder of L&G and he does not in one of the property subsidiaries of L&G. In 1998, he was have any conflict of interest with L&G. He has no conviction appointed the Chief Operating Officer to head the property for any offences over the last five (5) years and has not been operations of L&G in Australia and returned to Malaysia in imposed with any public sanction or penalty by the relevant 2005 to be based in Kuala Lumpur as the Director of Property regulatory bodies during the financial year 2021. Division, L&G.
He attended eight (8) out of eight (8) Board Meetings held Currently, he sits on the Board of a few subsidiaries of L&G. during the financial year ended 31 March 2021. Encik Ferdaus does not have any family relationship with any Mr Low is a member of the Risk Management Committee of Director and/or major shareholder of L&G and he does not L&G and a committee member of the Tabung Amanah Land have any conflict of interest with L&G. He has no conviction & General Berhad. for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant regulatory bodies during the financial year 2021.
He attended eight (8) out of eight (8) Board Meetings held during the financial year ended 31 March 2021. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 05 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
From left to right:
DATO’ IR DR A BAKAR JAAFAR Senior Independent Non-Executive Director
DATO’ HJ IKHWAN SALIM DATO’ HJ SUJAK Independent Non-Executive Director
Dato’ Ir Dr A Bakar Jaafar, a Malaysian male aged 71, He attended eight (8) out of eight (8) Board Meetings held was appointed as Director of L&G on 18 October 1999 and during the financial year ended 31 March 2021. redesignated as the Senior Independent Director of L&G on 28 November 2012. He is an engineer by profession and holds Dato’ Ir Dr A Bakar is the Chairman of the Remuneration a Bachelor of Engineering (Honours) degree in Mechanical Committee as well as a member of the Audit Committee, Engineering from the University of Newcastle, Australia, a Nominating Committee and Risk Management Committee Master of Environmental Science from Miami University of L&G. and a Doctorate in Marine Geography from the University of Hawaii at Manoa and Honorary Doctorates in Science from University Malaysia Terengganu and the University of Dato’ Hj Ikhwan Salim Dato’ Hj Sujak, a Malaysian male aged Newcastle, Australia. On 10 February 2018, he was awarded 64, was appointed as Director of L&G on 1 December 2007. with “Tokoh ASAS 2018” from “Persatuan Alumni Sekolah He holds a Bachelor of Science (Economics & Accounts) from Alam Shah”. Queen’s University Belfast, United Kingdom.
He served in the Malaysian Civil Service for over 22 years In 1977, he began his career as an auditor with Coopers in various positions including as the Director-General of the & Lybrand, UK and joined Nestle (M) Sdn Bhd as Finance Department of Environment from 1990 to 1995. He continued Executive in 1979. In 1980, he moved on to be the Group to serve the Malaysian Government as the Elected-Member Financial Planning Manager of Kumpulan Low Keng Huat to the Commission on the Limits of Continental Shelf, UN Sdn Bhd. HQ, New York (1997-2002) (2002-2007) (2007-2012). He is now a Professor at the Perdana Centre, Razak Faculty Currently, Dato’ Hj Ikhwan runs his private business, of Technology & Informatics of University of Technology Konsortium Jaringan Selangor Sdn Bhd. He is also a Board Malaysia (UTM), and as Research Fellow of UTM Ocean member of Malaysia Steel Works (KL) Berhad, Glomac Thermal Energy Centre (OTEC) and Chairman of Malaysian Berhad and several private limited companies. Green Technology and Climate Change Centre (MGTC) since 4 October 2019. Dato’ Hj Ikhwan does not have any family relationship with any Director and/or major shareholder of L&G and he Currently, Dato’ Ir Dr A Bakar sits on the Board of several does not have any conflict of interest with L&G. He has no private limited companies. conviction for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by Dato’ Ir Dr A Bakar does not have any family relationship the relevant regulatory bodies during the financial year 2021. with any Director and/or major shareholder of L&G and he does not have any conflict of interest with L&G. He has no He attended eight (8) out of eight (8) Board Meetings held conviction for any offences over the last five (5) years and during the financial year ended 31 March 2021. has not been imposed with any public sanction or penalty by the relevant regulatory bodies during the financial year 2021. He is the Chairman of the Audit Committee of L&G. OVERVIEW CORPORATE GOVERNANCE 06 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
DIRECTORS’ PROFILE
From left to right:
YM TENGKU MARUAN TENGKU ARIFF Independent Non-Executive Director
HOONG CHEONG THARD Non-Independent Non-Executive Director
YM Tengku Maruan Tengku Ariff, a Malaysian male aged 68, Mr Hoong Cheong Thard, a Malaysian male aged 52, was appointed as Director of L&G on 1 July 2008 and was was appointed as Director of L&G on 1 June 2010. He is a redesignated as Independent Non-Executive Director on 24 member of the Institute of Chartered Accountants in England August 2011. He holds a Bachelor of Mechanical Engineering and Wales (ICAEW) and holds a Bachelor in Mechanical (Design) Degree from University of Huddersfield, United Engineering degree from Imperial College, University of Kingdom. London, United Kingdom.
YM Tengku Maruan started his career as a credit officer with Mr Hoong has extensive experience in mergers and Citibank Berhad, Kuala Lumpur (“Citibank”) in 1980 where acquisitions as well as international capital markets. He was he was exposed to various aspects of the banking industry. an investment banker for over 12 years and had held senior In 1985, YM Tengku Maruan left Citibank holding the position positions at Deutsche Bank, Hong Kong and UBS, Hong Kong of Manager and joined Southern Bank Berhad as the Head where he was responsible for corporate finance business in of Personal Banking Division where he was involved in all Asia. aspects of budgeting, credit, product marketing and business development. Subsequently in 1996, he joined Rohas Sdn Mr Hoong was the Chief Executive Officer of China Bhd (“Rohas”) as the General Manager and also served on LotSynergy Holdings Ltd (a company listed on the Hong Kong the board of several companies related to Rohas until his Stock Exchange) (2006) prior to joining Far East Consortium retirement in 2008. While in Rohas, he was responsible International Limited (“FECIL”) in September 2008 as for various business operations such as manufacturing, Managing Director. education, property management and investments. As the Managing Director of FECIL, Mr Hoong is responsible Currently, YM Tengku Maruan sits on the Board of several for the formulation and implementation of the FECIL group’s private limited companies. overall strategies for development.
YM Tengku Maruan does not have any family relationship Mr Hoong also sits on the Board of several public companies with any Director and/or major shareholder of L&G and he which are incorporated and listed overseas and several does not have any conflict of interest with L&G. He has no private limited companies which are incorporated in conviction for any offences over the last five (5) years and Malaysia. has not been imposed with any public sanction or penalty by Mr Hoong does not have any family relationship with any the relevant regulatory bodies during the financial year 2021. Director and/or major shareholder of L&G and he does not He attended eight (8) out of eight (8) Board Meetings held have any conflict of interest with L&G. He has no conviction during the financial year ended 31 March 2021. for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant YM Tengku Maruan is a member of the Nominating regulatory bodies during the financial year 2021. Committee and Risk Management Committee of L&G. He attended seven (7) out of eight (8) Board Meetings held during the financial year ended 31 March 2021.
Mr Hoong is a member of the Audit Committee and Remuneration Committee of L&G. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 07 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
CHIU ANDREW WAH WAI Non-Independent Non–Executive Director
Mr Chiu Andrew Wah Wai, a male Chinese citizen of Hong Mr Chiu is the member of Hong Kong Beijing Kong SAR aged 32, was appointed as Director of L&G on 1 Association , Vice Chairman of April 2014. Federation of HK Jiangsu Community Organisations , Member of Shenzhen Overseas Mr Chiu is the founder and the Executive Chairman of Land Friendship Association , Member Pacific Limited, Deacon House International Limited and of The Real Estate Developers Association of Hong Kong Ariana Social Community Limited. Land Pacific Limited was and Member of Hong Kong General formed in 2013 is a property development company focusing Chamber of Commerce (“HKGCC”) . on residential and commercial developments in South East Asia. Deacon House International Limited formed in 2015 is a Mr Chiu is the son of YBhg Tan Sri Dato’ David Chiu, the major hotel company based on Chinese contemporary designs and and controlling shareholder of Prestige Aspect Sdn Bhd, the influences, exemplifying Chinese cultures and traditions with holding company of Malaysia Land Properties Sdn Bhd and a modern twist. Ariana Social Community Limited formed in its subsidiaries (Mayland Group). 2016 is a community based student housing company with its flagship property in Farringdon, London and projects He does not have any conflict of interest with L&G. He has pipelined in England, Australia and North America. no conviction for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by Mr Chiu started his career with DTZ Hong Kong in 2008, he the relevant regulatory bodies during the financial year 2021. joined FECIL in 2009 and was appointed as the business development manager of FECIL in 2012. He is responsible He attended eight (8) out of eight (8) Board Meetings held for property investment and development for FECIL. From during the financial year ended 31 March 2021. 2015, Mr Chiu serves as the assistant to the Chairman of FECIL. Mr Chiu is a member of the Remuneration Committee of L&G. Mr Chiu was appointed as Director of Ju Ching Chu English College Limited in May 2018, he is also an Executive Director of i-Cable Communications Limited and Director of Malaysia Land Properties Sdn Bhd. OVERVIEW CORPORATE GOVERNANCE 08 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
DIRECTORS’ PROFILE
DATO’ NOORIZAH HJ ABD HAMID Independent Non–Executive Director
Dato’ Noorizah Hj Abd Hamid, a Malaysian female Currently, Dato’ Noorizah sits on the Board of Scientex aged 61, was appointed as Director of L&G on Berhad, Petron Malaysia Refining & Marketing Bhd and 1 December 2018. She holds a Master in Business several private limited companies. Administration (Finance & Management) from Central Michigan University, USA, a Bachelor of Science in Business Dato’ Noorizah does not have any family relationship with any Administration (Finance) from Central Michigan University, Director and/or major shareholder of L&G and she does not USA and a Diploma in Accountancy from MARA Institute of have any conflict of interest with L&G. She has no conviction Technology. for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant Dato’ Noorizah has more than 30 years of work experience regulatory bodies during the financial year 2021. and has extensive experience in corporate finance and strategic management. She was the Managing Director/ She attended eight (8) out of eight (8) Board Meetings held Chief Executive Officer of PLUS Expressways International during the financial year ended 31 March 2021. Berhad and PLUS Malaysia Berhad from 2012 to 2016 and also the Managing Director of PLUS Expressways Berhad She is the Chairman of the Risk Management Committee of from 2007 to 2012. L&G.
Prior to that, she was the Managing Director of Faber Group Berhad and Faber Hotels Holdings Berhad from 1999 to 2007 and had also held other senior positions which include Senior General Manager Finance of Projek Lebuhraya Utara Selatan Berhad and Senior Manager of Hatibudi Management Sdn Bhd (UEM Group). OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 09 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) KEY SENIOR MANAGEMENT PROFILE
TAN BOON SIONG JENNY CHEE YUET SIN Chief Financial Officer Group Financial Controller
Mr Tan Boon Siong, a Malaysian male aged 53, joined L&G on Ms Jenny Chee Yuet Sin, a Malaysian female aged 56, 1 March 2016 as Corporate Advisor and later was appointed was appointed as Group Financial Controller of L&G on as Chief Financial Officer on 1 October 2017. He graduated 1 December 2010. She holds a Professional Qualification with a Bachelor of Commerce (Hons) Degree from University from CPA Malaysia and is a member of Malaysia Institute of of Melbourne and is a member of Australian Society of Certified Public Accountants (MICPA) and Malaysian Institute Certified Practising Accountants and Malaysian Institute of of Accountants (MIA). Accountants (MIA). Prior to joining L&G, Ms Jenny Chee Yuet Sin had worked Mr Tan Boon Siong has over 30 years of work experience in as a Group Finance Manager in a public listed company audit, finance, corporate finance, investment banking and and a Senior Manager with the Big Four accounting firms, private equity roles. He has worked extensively in various PricewaterhouseCoopers and Ernst & Young. She is a capacities, which includes stints at one of the Big Four Chartered Accountant with more than 22 years of experience accounting firms, corporate finance and investment banking in finance, audit and taxation covering various industries at an investment bank, Finance Director at a Malaysian such as manufacturing & trading, hospitality and property conglomerate, including a 9-year stint in the United Kingdom. development.
Currently, Mr Tan Boon Siong sits on the Board of a few Ms Jenny Chee Yuet Sin does not have any family relationship subsidiaries and an associate company of L&G. with any Director and/or major shareholder of L&G and she does not have any conflict of interest with L&G. She has no Mr Tan Boon Siong does not have any family relationship conviction for any offences over the last five (5) years and has with any Director and/or major shareholder of L&G and he not been imposed with any public sanction or penalty by the does not have any conflict of interest with L&G. He has no relevant regulatory bodies during the financial year 2021. conviction for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant regulatory bodies during the financial year 2021. OVERVIEW CORPORATE GOVERNANCE 10 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
KEY SENIOR MANAGEMENT PROFILE
TAI YOON JEN CHIN FOO TECK Project Director Senior Project Manager
Mr Tai Yoon Jen, a Malaysian male aged 49, joined L&G on Mr Chin Foo Teck, a Malaysian male aged 60, joined L&G on 10 July 2017 as Project Director. He holds a Bachelor of 8 February 2012 as the Senior Project Manager in property Development Science from National University of Malaysia implementation. and a Master of Science in Planning from University Science Malaysia. He is also a Graduate Member of Malaysian Mr Chin Foo Teck attained his Master in Business Institute of Planners. Administration from University of Leicester UK in 2002 and graduated with a Diploma from Tunku Abdul Rahman Mr Tai Yoon Jen has over 24 years of work experience in College, Kuala Lumpur in 1984. property development and construction industries. He has worked extensively in various capacities which includes as Mr Chin Foo Teck has more than 33 years of experience in Chief Operating Officer in KIP Group Sdn Bhd, Group General property development and construction industries. Manager of Projects in Plenitude Berhad and Deputy General Manager in Dijaya Corporation Berhad. Prior to joining L&G, he also held other senior position in several established public companies. He has hands- Mr Tai Yoon Jen does not have any family relationship with any on experience in managing high rise residential building Director and/or major shareholder of L&G and he does not and project management of high end lifestyle residential have any conflict of interest with L&G. He has no conviction development. for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant Currently, Mr Chin Foo Teck sits on the Board of a few regulatory bodies during the financial year 2021. subsidiaries of L&G.
Mr Chin Foo Teck does not have any family relationship with any Director and/or major shareholder of L&G and he does not have any conflict of interest with L&G. He has no conviction for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant regulatory bodies during the financial year 2021. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 11 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
CHIAH HWA KAI JENNY YAP YIN KUEN Senior Project Manager Senior Manager, Township Development
Mr Chiah Hwa Kai, a Malaysian male aged 45, joined L&G on Ms Jenny Yap Yin Kuen, a Malaysian female aged 56, was 18 July 2011 as Project Manager and was later promoted to appointed as Senior Manager, Township Development of Senior Project Manager in 2015. He holds a B. Eng (Hons) in L&G on 15 October 2014. She holds an Advanced Diploma in Civil Engineering from University of Leeds and is a Graduate Business & Management from Swansea Institute (associated Member of the Institution of Engineers Malaysia. institution of University of Wales).
Mr Chiah Hwa Kai has over 19 years of work experience in Ms Jenny Yap Yin Kuen has more than 20 years working property development and construction industries. He has experience in the property development industry with SP worked extensively in various capacities in his previous Setia Berhad in various capacities and experience. companies which involved in projects such as residential, shopping complex and highways. Currently, Ms Jenny Yap Yin Kuen sits on the Board of a few subsidiaries of L&G. Currently, Mr Chiah Hwa Kai sits on the Board of a few subsidiaries of L&G. Ms Jenny Yap Yin Kuen does not have any family relationship with any Director and/or major shareholder of L&G and she Mr Chiah Hwa Kai does not have any family relationship does not have any conflict of interest with L&G. She has no with any Director and/or major shareholder of L&G and he conviction for any offences over the last five (5) years and has does not have any conflict of interest with L&G. He has no not been imposed with any public sanction or penalty by the conviction for any offences over the last five (5) years and relevant regulatory bodies during the financial year 2021. has not been imposed with any public sanction or penalty by the relevant regulatory bodies during the financial year 2021. OVERVIEW CORPORATE GOVERNANCE 12 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
KEY SENIOR MANAGEMENT PROFILE
DR STEVEN BAPTIST DR WONG SIEW CHIN Principal, Sri Bestari Private School Kuala Lumpur Principal, Sri Bestari International School
Dr Steven Baptist, a Malaysian male aged 53, was appointed Dr Wong Siew Chin, a Malaysian female aged 41, was as Principal of Sri Bestari Private School Kuala Lumpur on 3 appointed as Principal of Sri Bestari International School on June 2013. He is a double degree and double Masters holder 8 May 2017. She holds a Bachelor of Science from University coupled with a Doctorate and professional qualifications. He of Malaya, a Master of Science from University of Malaya has more than 20 years’ experience in the education industry. and a Doctorate in Management and Education Policy from University of Malaya. She is also a Master holder in Business Dr Baptist does not have any family relationship with any Administration from Monash University. Director and/or major shareholder of L&G and he does not have any conflict of interest with L&G. He has no conviction Dr Wong Siew Chin has more than 16 years of work for any offences over the last five (5) years and has not been experience in the private education sector. Prior to joining imposed with any public sanction or penalty by the relevant Sri Bestari International School, she has worked extensively regulatory bodies during the financial year 2021. in various capacities. She started off her career as a Lecturer in Tunku Abdul Rahman College. Dr Wong was then with Cempaka International School where she helmed various academic and management positions over the course of 14 years, from an A-Levels teacher to becoming the Head of A-Levels and later as a Principal in Cempaka Schools (National and International Schools), Cheras campus.
Dr Wong Siew Chin does not have any family relationship with any Director and/or major shareholder of L&G and she does not have any conflict of interest with L&G. She has no conviction for any offences over the last five (5) years and has not been imposed with any public sanction or penalty by the relevant regulatory bodies during the financial year 2021. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 13 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) CHAIRMAN’S STATEMENT
RM134.89 MILLION Revenue FY2021
DEAR SHAREHOLDERS,
The property industry has slowed down OPERATING LANDSCAPE considerably over the past years. While the Group As the world continues to battle the pandemic, it will take a saw improved profitability for the financial year while before business returns as usual. under review, we continue to approach the future with cautious optimism, mindful of the lingering The Malaysian government has had to employ unprecedented measures to mitigate the impact of the economic contraction effects of the pandemic on the economy. such as reducing the overnight policy rate (“OPR”) in phases over the year to 1.75% - the lowest ever1. On behalf of the Board of Directors, I am pleased With most sectors unable to operate during the initial to share with you Land & General Berhad (“L&G”) Movement Control Order (“MCO”) in March 2020, Malaysia’s Group’s (“the Group”) Annual Report for the gross domestic product (GDP) contracted 5.6%1. The property financial year ended 31 March 2021 (“FY2021”). sector was not spared. Meanwhile, the global economy is estimated to have contracted 3.7%2.
The property market is expected to see a mixed performance for the duration of the year due to prevailing uncertainties. However, consumer confidence in the property sector is expected to improve by the end of 2021, supported by the vaccination programme rollout and current low interest rate environment. OVERVIEW CORPORATE GOVERNANCE 14 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
CHAIRMAN’S STATEMENT
FINANCIAL PERFORMANCE DIVIDEND
The Group continued to be profitable despite the challenging The Board is pleased to recommend a single tier final economic environment. dividend payment of 0.5 sen per share in respect of the financial year ended 31 March 2021. This dividend is subject Year-on-year, L&G Group posted a marginally lower revenue to shareholders’ approval at the forthcoming annual general of RM134.89 million for FY2021 from RM139.72 million in the meeting. previous year but our net profit increased to RM33.13 million, from RM20.63 million previously. CORPORATE GOVERNANCE The completion and handing over of vacant possession for two projects - Astoria Ampang Phase 1 in Ampang and We continue to uphold the highest standards of corporate Sena Parc Phase 1A in Senawang, Negeri Sembilan - in governance and continuously update our policies as per September 2020 resulted in lower operating revenue for this regulatory requirements and industry best practices. Further segment. However, as these projects reached completion, details on the Group’s corporate governance practices are our development cost was significantly lowered, contributing disclosed in the subsequent sections of this annual report. to the marked increase in net profit. The higher sales and progress billings of Damansara Seresta project in Bandar Sri Damansara has helped mitigate the reduction in revenue from the two completed projects.
For our education division, overall student headcount OUR SCHOOLS, SRI BESTARI PRIVATE increased and divisional revenue for the schools improved. SCHOOL (“SBPS”) AND SRI BESTARI Operating profits however were lower attributed mainly to INTERNATIONAL SCHOOL (“SBIS”) the full year depreciation from the Sri Bestari International School buildings which were completed in August 2019 and SAW OUR STUDENTS RECORDED higher payroll costs arising from the hiring of additional EXCELLENT ACADEMIC RESULTS FOR teachers. THE SPM, IGCSE, AND CAMBRIDGE ASSESSMENTS, DESPITE HAVING TO Our schools, Sri Bestari Private School and Sri Bestari SHIFT CLASSES ONLINE. THIS IS A International School saw our students recorded excellent academic results for the SPM, IGCSE, and Cambridge TESTAMENT TO THE QUALITY OF Assessments, despite having to shift classes online. This is EDUCATION AND COMMITMENT OF a testament to the quality of education and commitment of OUR TEACHERS. our teachers.
For our other operations, we see bamboo as the sustainable crop of the future. At the Ladang Sg Jernih, we have commenced planting bamboo to replace 116 ha of old rubber trees which were felled in the previous year. Our oil palm plantation benefited from the high CPO prices during the financial year and returned a higher year-on-year profit.
More information is available in the Management Discussion and Analysis. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 15 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
CHAIRMAN’S STATEMENT
SUSTAINABILITY
We align our corporate responsibility efforts and business performance to meaningfully support the United Nations’ WHILE WE EXPECT THE GROUP’S Sustainable Development Goals (“UNSDGs” or “Goals”). PERFORMANCE TO REMAIN SLUGGISH, WE WILL CONTINUE There are many firsts in our Sustainability Report this year: TO MONITOR OUR OPERATING CONDITION AND ADDRESS ANY a) Added UNSDG #5: Gender Equality, to the six Goals DEVELOPMENT ACCORDINGLY, already in place; b) Added 5 new Key Performance Indicators (KPI) to the WITH THE LONG-TERM VIEW OF eleven KPIs that are already in place; MAXIMISING VALUE FOR OUR c) Included our plantation division into the scope of our SHAREHOLDERS. reporting for the first time; and d) Reported Greenhouse Gas (GHG) emissions for the first time.
We have identified KPIs for all material sustainability matters ACKNOWLEDGEMENT and the KPI for local community contribution is currently being developed and will be implemented in future reporting On behalf of the Board, I would like to express my sincere periods. gratitude to my fellow Board members, our senior management team and our employees for their continued Details on our sustainability activities is available in the perseverance and guidance during these trying times. Sustainability Report included in this Annual Report. Indeed, their contributions have resulted in our continued profitability.
MOVING FORWARD I would also like to extend my gratitude to all our customers, associates, regulators and the relevant government As the world, and Malaysia, continue to endure the effects of authorities for their support. the pandemic, we remain vigilant on our outlook. And last, but definitely not least, I would like to thank our While we expect the Group’s performance to remain sluggish, valued shareholders for their continued trust in the Group. I we will continue to monitor our operating condition and hope to continue on this journey with you. address any development accordingly, with the long-term view of maximising value for our shareholders. Thank you.
Dato’ Hj. Zainal Abidin Putih Chairman
12 August 2021
References: 1 Economic and Monetary Review 2020 (Bank Negara Malaysia) 2 Global Economic Prospects, January 2021 (World Bank Group) OVERVIEW CORPORATE GOVERNANCE 16 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) MANAGEMENT DISCUSSION AND ANALYSIS
RM107.91 MILLION Property Division Revenue FY2021
DEAR SHAREHOLDERS,
As we enter the second year of fighting the Despite the challenges, the Group’s profit after tax increased pandemic, we have adjusted to the new norms, to RM33.13 million for FY2021, from RM20.63 million previously. This is attributed to higher revenue recognition changing the way we do business. The financial from our Damansara Seresta project and lower development year 2021 was challenging, with the continued costs arising from the completion of our Astoria Ampang impact of movement restrictions weighing Phase 1 and Sena Parc Phase 1A in September 2020. Revenue was slightly lower at RM134.89 million, from RM139.72 heavily on our prospects. million in FY2020, attributed to the handing over of vacant possessions for the completed projects. However, L&G Group’s resilience and our ability Given the challenging outlook on the property sector, the to utilise resources efficiently enabled the Group’s performance is a testament to our continued ability Group to navigate these difficult circumstances to deliver sustained value for our stakeholders. to ensure another year of profitability. The team effort and synergy of our people to innovate and adapt has allowed us to create new inroads in how we develop and market our properties. The Group has an undeveloped landbank of over 3,000 acres and the future development at these choice locations will enable the Group to create sustainable value in the long term. We have several exciting projects at these prime locations in the pipeline, and we are confident that these will carry the Group well into the immediate and medium-term future. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 17 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
MANAGEMENT DISCUSSION AND ANALYSIS
FINANCIAL PERFORMANCE
The Group’s financial results for FY2021 continue to be driven by our property division. Operating expenses declined to RM119.72 million from RM136.65 million in FY2020, as property development costs declined with the completion of Astoria Ampang Phase 1 and Sena Parc Phase 1A. Earnings per share increased to 1.02 sen from 0.5 sen previously. In 2020, transactions in the property market performance declined by 9.9% in volume and 15.8% in value year-on- The Board has recommended a final single tier dividend of year, with 295,968 transactions worth RM119.08 billion, from 0.5 sen per share in respect of the financial year ended 31 328,647 transactions worth RM141.4 billion. March 2021. For residential properties, there were 191,354 transactions For the year under review, the Group recorded a narrower worth RM65.87 billion recorded in 2020, a decrease of 8.6% loss on fair value changes of RM1.16 million (FY2020: in volume and 9.0% in value compared with 2019 (209,295 RM3.94 million) from our investment in Vietnam Industrial transactions worth RM72.41 billion). Investments Ltd, a company listed on the Australian Securities Exchange. The Group however recorded a loss of The residential overhang situation improved slightly with RM1.95 million from our share of results from our associated 29,565 overhang units worth RM18.92 billion recorded in Q4 company, Country Garden Properties (Malaysia) Sdn Bhd as 2020, reduced by 3.6% in volume year-on-year. However, the compared to a profit of RM2.31 million in the previous year. value increased by 0.5% against Q4 2019 (30,664 units worth This was offset by our share of results from our joint venture RM18.82 billion). at Hidden Valley, Australia of RM2.97 million (FY2020: RM323,000). As most developers had deferred the new launches to focus on selling remaining unsold inventories, the primary market saw fewer new launches. There were 47,178 units launched in REVIEW OF OPERATIONS 2020, against nearly 60,000 units in 2019. Sales performance was modest at 28.7% in 2020, lower than 2019 at 40.4%. PROPERTY DIVISION The Group began to move its marketing channels onto digital L&G’s core business, the property division, contributed platforms prior to the pandemic and we will continue to a lower revenue of RM107.91 million in FY2021 utilise these tools, further enhancing them with a Virtual (FY2020:RM116.01 million) and operating profit of RM24.21 Sales Gallery that will offer our customers a complete virtual million (FY2020:RM24.58 million) attributed to the handing experience. We are also expanding our marketing efforts over of vacant possessions for two projects – Astoria Ampang to include non-property platforms to widen our reach to Phase 1 and Sena Parc Phase 1A in Senawang, Negeri potential customers. Sembilan. This was offset by the higher sales and progress billings at the Damansara Seresta project. The government has introduced various measures to cushion the impact of the pandemic on the property market, which The Malaysian property market has been weak for the past include the reintroduction of the Home Ownership Campaign few years and the subsequent Covid-19 pandemic further (HOC) providing stamp duty exemption on the instruments of dampened the market for both residential and commercial transfer and loan agreement for the purchase of residential properties. homes priced between RM300,000 to RM2.5 million, Real Property Gains Tax (RPGT) exemption for disposal of residential homes from 1 June 2020 to 31 December 2021 (capped at three units per individual), and uplifting of the current 70% financing margin limit for the third property purchase. OVERVIEW CORPORATE GOVERNANCE 18 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
MANAGEMENT DISCUSSION AND ANALYSIS
These measures along with the vaccination rollout, will help to improve the sentiment of the property market.
We completed Phase 1 of Astoria Ampang comprising 506 units in September 2020, achieving a take up rate of 76% for this project. The development, located in Ampang, Selangor, seamlessly integrates a total of 1,012 units of serviced Our other future launches are progressing well. Aria apartments into green surroundings and carries a gross Rimba is a 112.35-acre mixed development township in development value (“GDV”) of RM740 million. The Group will Section U10, Shah Alam, with 14 acres of community parks, launch Phase 2 comprising 506 units in the near future. nestled in the lush greenery next to the Bukit Cherakah Forest Reserve. The development is accessible by the New In September 2020, we also completed Phase 1A consisting Klang Valley Expressway, Guthrie Corridor Expressway, of 163 units of two-storey houses at our Sena Parc township ELITE Expressway, Federal Highway, and DASH Highway in Senawang, Negeri Sembilan, and vacant possession has (to be completed). The project consists of 606 units of 2-3 been handed over. We recorded a 98% take up rate for this storey terrace houses, 150 units of semi-detached houses, phase. Phase 1 of Sena Parc offers eight thematic parks and 770 units of Rumah Selangorku and 727 units of serviced spacious garden homes with views of surrounding parks. The apartment with a total GDV of RM1.1 billion. Due to the Group recently launched Sena Parc Phase 1C, comprising 54 current economic situation, the Group has decided to defer units of double-storey terrace houses, and is preparing to the launching date to 2022. launch Phase 1D comprising 162 units of two-storey houses in the near future. In Semenyih, Selangor, we are developing the Diamond City project in a joint venture with Country Garden Properties Our Damansara Seresta project, located in Bandar Sri (Malaysia) Sdn Bhd. Plot A of Diamond City has four phases, of Damansara, consists of two blocks of 452 units of luxurious which three phases were completed and have recorded sales high-rise condominium. This on-going project has registered take up rate of 96% for Phase 1, 99% for Phase 2 and 93% a 56% take up rate. Another nature-inspired development for Phase 4. Phase 3, consisting of a high-end development, built against the backdrop of the Bukit Lanjan Forest is under review due to the current economic climate. Plot Reserve, the built-up area of the condominium units ranges B of Diamond City has five phases of which Phase 1, 2 and from 1,300 sq. ft. to 1,800 sq. ft. for standard units and 2,500 4 have been completed and have recorded a take up rate of sq. ft. to 3,200 sq. ft. for penthouses. This project is targeted 98% for Phase 1, 88% for Phase 2 and 99% for Phase 4. One for completion in the fourth quarter of 2022. of the two remaining phases in Plot B will be launched in the second half of the year, comprising bungalows, townhouses The land where the former Sri Damansara Club (“SD Club”) and link houses. was located will be developed in five phases. Plot 1 which comprises 15 units of retail lots, sales gallery and show Abroad, the Group’s Hidden Valley development in Melbourne, units are currently under construction. Plot 2 and Plot 3 has a balance GDV of AUD11.84 million (excluding bushland). comprise of 732 units of serviced apartments and 602 units There are 26 lots remaining out of a total of 950 lots, which of affordable homes respectively, are currently waiting for we expect to sell by the end of 2023. approvals to launch. As the COVID-19 pandemic has weakened the general market The combined project launches for this forthcoming year, sentiment, the launching dates of our upcoming projects which includes the Astoria Ampang Phase 2, Sena Parc have been slightly delayed. Phase 1C and 1D, and Plot 2 developments at SD Club land, will be in excess of RM800 million. To mitigate the impact of the MCO, the Group has implemented group wide cost-cutting measures. The relief measures implemented by the Government such as wage subsidy programme also helped relieve the financial burden of the Group. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 19 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
MANAGEMENT DISCUSSION AND ANALYSIS
EDUCATION DIVISION
Our education division, which operates Sri Bestari Private School (“SBPS”) and Sri Bestari International School (“SBIS”), recorded a higher revenue of RM22.48 million in FY2021, from RM19.43 million previously. Operating profit for FY2021 was lower at RM5.72 million, from RM6.25 million in FY2020. The pandemic has highlighted the need for a focused approach to education as students have found it difficult Although overall revenue for the segment improved and to rely on resources such as TV Pendidikan. Throughout student enrollment for the schools increased, operating the school year, the school has managed to complete the profit was impacted by full year depreciation of the new SBIS curriculum through online classes, with schooling hours buildings and facilities which were completed in August as usual, and all exams/assessments were completed. Our 2019 and the higher payroll costs arising from the hiring of students achieved excellent results in SPM 2020 and the additional teachers. IGCSE exam.
SBPS offers students a comprehensive high-quality The school also provides special needs education, with more education programme from kindergarten, primary and than six years of experience with Education and Learning secondary levels based on the Malaysian national syllabus Support Academy (ELSA) students. The demand in this field and has 947 students as at 31 July 2021. is high, with more than 300 students currently on the waiting list, and we believe that this niche offering will set the school The school also offers optional examinations such as the New apart other private schools. South Wales Examination (NSWE), Cambridge Checkpoints Examination, IGCSE Examination and the Hanyu Shuiping With all that SBPS has to offer, we believe that the school Kaoshi Mandarin Exam (HSK). is positioned to capture the demand for high quality and affordable education, especially now. As one of only five Inquiry Based Science Education (“IBSE”) schools in the country, our science teachers are regularly Meanwhile, our international school, SBIS, caters to parents trained by renowned scientists from ISTIC (International looking for a holistic approach to education, with English as Science, Technology, and Innovation Centre for South- the medium of instruction. South Cooperation under the auspices of UNESCO) and the Fondation La main à la pâte, Paris. The school is the only SBIS offers high-quality education focusing on instilling IBSE Pilot Centre associated with Fondation La main à la the entrepreneurial mindset as well as STEAM (Science, pâte in Peninsular Malaysia. Technology, Engineering, Arts and Mathematics) education. Currently in its fourth academic year, the school student It also has an active sustainability programme and has been enrolment has increased to 380 as at 31 July 2021, despite awarded its third ECO School Green Flag by WWF-Malaysia the deferments and cancellations arising from the pandemic. and the Foundation for Environment Education, Denmark (FEE). During the school year, SBPS embarked on a virtual Seated on a 15-acres plot, its campus houses multiple state- exchange programme with its sister school, Tokai Fukuoka of-the art facilities including purpose-built classrooms High School in Fukuoka, Japan. suited for the modern-day educational setting, ICT suites, auditorium with a capacity of 450 students, music & performing arts studios, fully-equipped laboratories, indoor and outdoor playgrounds, modern library, tennis court, basketball court, football field, 25-metre swimming pool and indoor multipurpose and sports hall. OVERVIEW CORPORATE GOVERNANCE 20 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
MANAGEMENT DISCUSSION AND ANALYSIS
The school has recently introduced additional subjects in its Cambridge curriculum to enhance students’ critical thinking skills and encourage them to be global thinkers. The mix of different nationalities and backgrounds is an excellent foundation for the students’ development in a borderless world.
To make online learning interesting and fun, the school We have commenced planting bamboo progressively to incorporated plenty of quizzes, games and activities into replace the 116 hectares of old rubber trees that were its curriculum. Teachers were supported with additional felled. We believe bamboo to be the crop of the future due training and tools to facilitate online teaching. to its many uses and ecological value. The plant also has a shorter maturity period compared to rubber or oil palm. With small class sizes, the students were able to maximise The Malaysian Timber Board has also been supportive of their online learning experience and SBIS also hosted the bamboo industry as a sustainable solution to depleting experts and entrepreneurs online to talk to the students reserves of tropical and rubberwood. about their respective areas. The shortage of available harvesters remains a key issue in Academically, the students are among the best in the the plantation industry, with restrictions on the recruitment country. Six students from primary and secondary of foreign workers due to the pandemic. The Group has levels achieved perfect scores in the Checkpoint extended its recruitment drive to include indigenous folks Assessment conducted in October 2020. living in the neighbouring areas, building a relationship with the communities. OTHER DIVISIONS We continue to maintain and harvest some 626 hectares of The Group’s other divisions comprise property investment, matured oil palm. In the longer term, this area will be used investment holding, and other segments. For the year under for the development of a master township covering 2,500 review, other divisions registered an increased operating acres. revenue of RM4.50 million, from RM4.29 million previously. Turning around from a loss of RM4.66 million in FY2020, the division recorded an operating profit of RM9.75 million mainly MOVING FORWARD due to the writeback of impairment loss on amount due from Hidden Valley of RM12.77 million during the financial year. With a track record of 30 years in property development, the Group has established a trusted name in the industry and the Our investment properties include Menara L&G in Putrajaya brand will continue to be a mark of quality and innovation. and 8trium in Bandar Sri Damansara. Although occupancy We have made significant inroads in the field of education at Menara L&G remains low due to the current slow demand as well. Although the current economic environment is for commercial property in Putrajaya, the Group has challenging, we remain cautiously optimistic in our outlook. continuously undertaken new marketing strategies to attract tenants. Occupancy at 8trium, which has been steady in the past, will improve this year with an existing tenant looking into taking up the balance retail space on the 1st floor.
Our other divisions include our rubber and oil palm estate Low Gay Teck at Ladang Sg. Jernih, Mukim Kerling, Hulu Selangor. As the Managing Director rubber trees are aged more than 30 years, we have ceased our own operations on the rubber estate and leased them to 12 August 2021 contractors in return for a share of the revenue. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 21 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) SUSTAINABILITY REPORT
INTRODUCTION
About This Statement (102-1, 102-3, 102-4, 102-46, 102-50, 102-52, 102-53)1
This statement marks Land & General Berhad’s (“Land & General” or “L&G” or “the Group”) fifth consecutive annual sustainability statement. As one of the leading property developers in Malaysia, Land & General is committed to drive continuous improvement with our sustainable business practices. This report demonstrates our achievements and the challenges we faced to implement sustainability initiatives and projects for the financial year 2021 (1st April 2020 to 31st March 2021).
As part of our efforts in enhancing our sustainability disclosures, the Group has expanded our scope of reporting to include Clarity Crest Sdn Bhd, our wholly-owned oil palm and rubber plantation.
The disclosures in this statement cover the following business divisions:
1. 2. 3. 4. HEADQUARTERS PROPERTY EDUCATION PLANTATION (HQ) DIVISION DIVISION DIVISION
8trium building, Damansara Sri Bestari Clarity Crest Sri Damansara, Seresta, Private School Sdn Bhd Selangor Sri Damansara (“SBPS”) Sena Parc, Sri Bestari Senawang International Astoria Ampang, School (“SBIS”) Ampang
Excluded from this statement is our “Other Division” which comprises mainly the rental income from Menara L&G in Putrajaya. This Division was excluded as it represents an insignificant portion (<1%) of Land & General’s total revenue, and is therefore not considered material to our sustainability risks and targets.
The contents of this report are aligned with the Main Market Listing Requirements issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) and the Sustainability Reporting Guide (2nd ed. 2018). In addition to the Bursa Malaysia requirements, disclosures have been prepared with reference to the Global Reporting Initiative (“GRI”) Standards – Core Option.
We value stakeholder feedback and encourage comments, questions, or suggestions on how we can further improve our sustainability performance. Please direct all comments and enquiries to:
Tan Boon Siong, Chief Financial Officer [email protected] +603-62798000
1 102-1: Name of the organisation, 102-3: Location of headquarters, 102-4: Location of operations, 102-46: Defining report content and topic boundaries, 102-50: Reporting period, 102-52: Reporting cycle, 102-53: Contact point for questions regarding the report OVERVIEW CORPORATE GOVERNANCE 22 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
SUSTAINABILITY REPORT
Sustainability Highlights for FY2021
Land & General’s approach to managing our economic, environmental and social impacts is motivated by our drive to create a better future for all. We take pride in the development and implementation of strategies and initiatives that enhance our sustainability performance across each division.
Greenhouse gas Scored a place in (“GHG”) emissions The Edge Top 30 reported for the Property Developers first time List 2020
Introduced 5 new Key Performance Indicators (“KPIs”) for better coverage Adopted of our Material UNSDG#5 Matters
SUSTAINABILITY HIGHLIGHTS FOR FY2021
Conducted interviews with some of our key stakeholders
Plantation Division Re-assessed our was inclued in the Material Matters scope of reporting for the first time OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 23 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
SUSTAINABILITY REPORT
SUSTAINABILITY POLICY
Last year, we affirmed our commitment to sustainability and accountability by publishing our group-wide Sustainability Policy. The Sustainability Policy was developed on the four pillars of our sustainability strategy: Marketplace, Workplace, Environment, and Community. It was officially approved by the Board in August 2020 and will be reviewed periodically to ensure its suitability and effectiveness.
MARKETPLACE WORKPLACE ENVIRONMENT COMMUNITY
• Conduct business • Attract, develop • Minimise • Contribute to practices with the and retain talents environmental socio-economic highest level of ethics by committing to impacts from our development and transparency fair employment operations via and strengthen • Comply with (and practices, provision monitoring and relationships with exceed where of career training, management of local community applicable) all relevant development our environmental in the areas legislation, regulations opportunities performance where we operate and codes of practice and competitive • Encourage any via community • Continuously improve remuneration consultant, engagement our product and packages. contractor and activities service quality to meet • Provide a supplier that • Maintain positive or exceed customer conducive working we employ to engagements with expectations environment take account of all stakeholders which promotes sustainability fair treatment issues of all employees regardless of gender, age and race, and protects employees’ health, safety and wellbeing
Promoting Enriching Protecting Engaging local our the with our economic employees environment community development OVERVIEW CORPORATE GOVERNANCE 24 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
SUSTAINABILITY REPORT
OUR SUSTAINABILITY JOURNEY 2021 2020 2019 • Plantation Division 2018 • Sustainability Policy included in disclosures 2017 • Usage of the GRI established indicators to guide • Sustainability KPIs • GHG emissions • Sustainability reported Committee and sustainability developed • First Sustainability • Additional KPIs Sustainability disclosures • 20 Material Matters Statement published introduced to better Working Group • The roles and • Six (6) UNSDG • First materiality encompass the established responsibilities of assessment and material matters • 18 Material Matters the SC and SWG identification of • SC and SWG • Five (5) United were formalised material matters adopted under the Nations’ Sustainable • 22 Material Matters • 12 Material Matters • Five (5) UNSDGs Risk Management Development Goals Committee (“UNSDGs”) • 14 Material Matters • Seven (7) UNSDGs
LAND & GENERAL’S SUSTAINABILITY APPROACH
Sustainability Key Performance Indicators (“KPIs”)
The setting of KPI targets provides clear, measurable goals for us to work towards throughout the financial year and in the long term, and allows us to more effectively measure our progress against previous years.
For FY2021, we have identified KPIs for all Material Sustainability Matters except for one, Local Community Contribution, and are pleased to announce that we have successfully met 14 out of a total 16 KPIs identified. The KPI for Local Community Contribution is currently being developed and will be implemented in future reporting periods.
Achieved In Progress Not Achieved
Material Sustainability Matter Key Performance Indicator Achievement Compliance To receive zero Stop-Work Orders from the No stop-work orders received Department of Environment (“DOE”) or the from DOE or DOSH. Department of Occupational Safety and Health (“DOSH”). Corporate Governance Comply with all principles of the Malaysian Code on All principles of MCCG complied Corporate Governance (“MCCG”). with. Anti-Corruption To record zero instances of non-compliance with the Zero instances of non- Anti-Bribery and Corruption Policy. compliance recorded. Economic Performance To pay dividends annually to shareholders. The Board of Directors has recommended 0.5 sen per share in dividends for FY2021. Supply Chain Management To achieve 65% local procurement. Total spending on local procurement was 60%. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 25 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
SUSTAINABILITY REPORT
Material Sustainability Matter Key Performance Indicator Achievement Climate Change To reduce electricity consumption by 5% Electricity consumption reduced by from the previous year. (exclusive of property 18.5%.* construction sites as electricity usage varies with development stage) Resource and Waste To ensure 100% of construction waste is 100% of construction wastes disposed Management disposed off at authorised landfills which are off at authorised landfills. licensed by the local authority. Recover 80% of scrap metal from construction 100% of scrap metal was recovered by a activities. recycling contractor. Employee Development To achieve average training hours of 2.5 Average of 3.0 training hours per and Well-being hours per employee for HQ, 12.0 hours per employee at HQ, 16.0 hours per staff employee for our Education Division, and member across the Education Division, 10.0 hours for the Plantation Division. and 10.0 hours per employee at the Plantation Division were recorded. Safety and Health To achieve zero man-hours lost due to Lost time injury frequency rate was 1.52 occupational accidents. as a result of four (4) lost-time injuries. Quality Products and To conduct a customer satisfaction survey Customer satisfaction survey was Services (Net Promoter Score) once a year and to conducted at Sena Parc and a score conduct a Hand Over Vacant Possession of 97% satisfaction was achieved. (“HOVP”) survey. Surveys for Astoria Ampang received low participation and were deemed to be unrepresentative. To achieve a minimum of 65% QLASSIC score Astoria Ampang received a QLASSIC for each project. score of 78%. Sena Parc was not assessed for a QLASSIC score as the project was initiated before the contract stipulation was introduced. Labour Practices Promote local employment by maintaining 95% of current staff are Malaysian greater than 90% Malaysian staff. citizens.
Maintain greater than 30% women in 42% of management roles are currently management roles. filled by women. Water and Effluents To maintain total water consumption below Total water consumption was 44,809m3, the FY2020 value of 53,000m3. a reduction of 15.5% * (exclusive of property construction sites as water usage varies with development stage)2 Biodiversity To dedicate a minimum land area to green Astoria Ampang has been designed with spaces as follows: 44% of the total land area dedicated to Highrise developments: 10% green space, Damansara Seresta with Landed developments: 20% 69%, and Sena Parc with 22%.
2 FY2020 was selected as the benchmark year as water consumption in FY2021 has been affected by Covid-19 pandemic.
* It is acknowledged that some of this reduction in electricity and water consumption is a result of the office closures resulting from the COVID-19 pandemic. Moving forward, we will strive to maintain this reduction as we operate under the “new normal”. OVERVIEW CORPORATE GOVERNANCE 26 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
SUSTAINABILITY REPORT
United Nations Sustainable Development Goals
We align our corporate responsibility efforts and business performance to meaningfully support the United Nations’ Sustainable Development Goals (“UNSDGs” or “Goals”), a collection of 17 widely adopted global goals set by the United Nations General Assembly for realisation by the year 2030.
We have adopted seven (7) UNSDGs which we believe are most relevant to our business and where we can make the most impact. This year, we adopted Goal #5: Gender Equality.
UNSDG Land & General’s Contributions and Initiatives UNSDG 3: • Established Occupational Safety, Health and Administration (“OSHA”) Good Health & committees for responsible identification and management of health and Well-being safety risks at all divisions. • Responded immediately to the COVID-19 pandemic to ensure the safety of our staff, students, and customers. • Design green spaces in our properties to promote wellness among our residents. • Provide healthcare benefits to all employees. UNSDG 4: • Both our schools place emphasis on teaching Science, Technology, Engineering, Quality Education Arts and Mathematics (S.T.E.A.M) to provide students a well-rounded education which prepares them for future success. • We provide a wide range of extracurricular activities for our students to further develop their abilities. • Average training hours of 16 hours per employee within the Education Division, 10 hours per employee within the Plantation Division, and 3 hours per employee at HQ this reporting period. UNSDG 5: • 60% of the Group’s employees are women. Gender Equality • 42% of the Group’s management staff are women. • Equal opportunity available to all staff in terms of hiring, promotion, and career development regardless of gender.
• Support employee work-life balance and provide annual leave, study leave, UNSDG 8: DECENT WORK 8 AND ECONOMIC Decent Work and GROWTH parental leave, and compassionate leave. Economic Growth
UNSDG 11: • Our properties are not located in areas that have high biodiversity value which Sustainable Cities would be damaged by development. Developments next to forest reserves, and Communities such as Damansara Seresta, are carefully managed to avoid damage to the SUSTAINABLE CITIES 11 AND COMMUNITIES reserve. • Our projects are designed with lush greeneries including features such as parks, wetlands, and waterfalls. • In planning our properties’ location, connectivity within the greater area is a key consideration. Access to public transport, shops, and services helps our residents to be well connected with the wider community. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 27 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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UNSDG Land & General’s Contributions and Initiatives UNSDG 13: • Recording and reporting GHG emissions enables us to take accountability of Climate Action the Group’s carbon footprint. • Our electricity consumption at HQ and the sales galleries reduced by 9.0% compared to last year. • SBPS awarded 3 WWF Eco School Green Flags which shows our commitment to climate change actions. UNSDG 16: • Implemented an Anti-Bribery and Corruption Policy, to complement the Peace, Justice, and Group’s Code of Conduct. Strong Institutions • Maintained compliance with all applicable laws and regulatory requirements. • Promptly investigate and address incidents of non-compliance.
STAKEHOLDER ENGAGEMENT (102-21, 102-40, 102-43, 102-44)3
The MCCG summarises the importance of stakeholder engagement with the statement: “Ongoing engagement and communication with stakeholders builds trust and understanding… it provides an avenue for invaluable feedback that can be used to understand stakeholder’s expectations and develop business strategies.”
Our corporate vision is “Building Value for Tomorrow”, and we aim to secure that value for our stakeholders by having effective and transparent communication with our stakeholders to better understand our stakeholder’s desires, and to take those concerns into account when making business decisions.
Our stakeholder engagement process is periodically assessed and improved. This way, we can ensure our stakeholder’s most current priorities and concerns are being heard and considered. This year, we reviewed our list of key stakeholders and narrowed it from 11 stakeholder groups to seven (7). This more accurately reflects those stakeholders of most relevance to our operations, and enables us to engage and connect with them more closely.
“SUSTAINABILITY IMPACTS EVERYONE.” Student at SBPS, Age 17
This year, we conducted interviews with members representing some of the key stakeholder groups, to hear their first-hand perspectives on sustainability at Land & General. Interviewees included parents and students from SBPS and SBIS, a stock analyst whose portfolio covers L&G, L&G employees, contractors from the Damansara Seresta project site, and customers who have purchased homes at Astoria Ampang and Sena Parc. Excerpts from these interviews can be found throughout the report.
3 102-21: Consulting stakeholders on economic, environmental, and social topics, 102-40: List of stakeholder groups, 102-43: Approach to stakeholder engagement, 102-44: Key topics or concerns raised OVERVIEW CORPORATE GOVERNANCE 28 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The table below outlines our key stakeholders, alongside the methods and frequency of engagement:
Stakeholder Group Method of engagement Frequency Key areas of concern Shareholders and Annual General Meeting Annually • Group’s financial Investors Interim results announcement Quarterly performance and dividend pay out Annual Report Annually • Corporate governance and Investor Relations page on the Throughout the year compliance Group’s website (Concerns and • Ethical business conduct queries directed to Chief Financial Officer / Company Secretary) Engagement with analysts and Quarterly fund managers Customers Feedback and enquiry templates Throughout the year Product quality: Advertising and marketing Throughout the year • Homes delivered with campaigns good workmanship, quality finishes and minimal Company website and social media Throughout the year defects. network • High quality fresh fruit Customer satisfaction survey When making a booking and bunches from our upon vacant possession Plantation Division • Regular updates on latest product and service offerings Employees Performance appraisal Annual process which • Training and career includes a mid-year check in development Staff e-portal (Education Division) As and when required • Safety and health at the workplace Work safety training on-site As and when required • Work-life balance Annual dinner Postponed for this reporting • Employee welfare and period due to COVID-19 benefits restrictions Team building activities Postponed for this reporting period due to COVID-19 restrictions Sports Club activities Postponed for this reporting period due to COVID-19 restrictions Best Employee Award Postponed for this reporting period due to COVID-19 restrictions Training and development Throughout the year OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 29 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Stakeholder Group Method of engagement Frequency Key areas of concern Parents and Students Student Portal and Parents’ Portal Throughout the year • Conducive school Campaigns and events Throughout the year environment and surroundings Open Day and Information Day Monthly • Strong academic Counselling sessions As and when required performance Schoology/School Management Throughout the year • Well-rounded extra- System curricular activities • Partnership between Parent and Student feedback End of term teachers and parents to support the child’s holistic development Government Agency Meetings with regulators As and when required • Approval and permit Site inspections As and when required • Compliance with the latest regulations and requirements Vendors and Contract negotiations As and when required • Cost of services Suppliers Supplier audits and evaluation As and when required • Quality and timely delivery • Legal compliance Vendor registration screening As and when required • Occupational Health and (pre-qualification of suppliers and Safety contractors) Civil Society Collaborations and discussions As and when required • Environmental impacts Organisations and with relevant Civil Society • Social contribution Local Community Organisations • Local community support Community engagement As and when required • Corporate Social programmes Responsibility (CSR) initiatives Strategic partnership As and when required
SUSTAINABILITY GOVERNANCE (102-32)4
A robust governance structure is the backbone of the Group’s strategy to strengthen our sustainability performance. Established in 2018, the structure comprises the Sustainability Committee (“SC”) and Sustainability Working Group (“SWG”). This year, the SC and the SWG come under the purview of the Risk Management Committee (“RMC”). This was a natural progression in our sustainability journey. Acknowledging the risks posed by climate change and other non-financial aspects of the business should be within the purview of the Committee who assess all risks embedded in the Group’s business, which is the RMC. The Risk Management Committee reports directly to the Board.
“THE BOARD SETS THE TONE FOR SUSTAINABILITY FROM THE TOP – THROUGH OUR SUSTAINABILITY POLICY AND KPIS.” Land & General Board of Directors
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BOARD OF • Oversees the overall progress of all sustainability initiatives. DIRECTORS • Issues final approval for sustainability policies, strategies, and initiatives recommended by the Risk Management Committee.
RISK MANAGEMENT • Oversees material economic, environmental, and social considerations which may COMMITTEE impact the Group. • Identifies emerging issues that may affect the supply chain or overall operations.
SUSTAINABILITY • Monitors the Working Group’s progress with sustainability initiatives COMMITTEE • Recommends sustainability policies, strategies, and new initiatives Led by: Managing Director
• Identifies sustainability material matters relevant to business operations. SUSTAINABILITY • Implements sustainability initiatives. WORKING GROUP • Conducts engagement sessions to raise awareness on sustainability matters across Led by: the business. Chief Financial Officer • Liaises with stakeholders to understand their key concerns and expectations.
MATERIAL SUSTAINABILITY MATTERS (102-47)5
A materiality assessment is conducted to identify sustainability matters that present the greatest opportunities and risks for the business, as well as influence stakeholder decisions. Our first materiality assessment was conducted in FY2017. Since then, we review our material matters annually to capture any shifts in company or stakeholder priorities as a result of business, economic, or global developments. Last year, we identified 20 matters.
This year, a materiality reassessment was conducted to review and consolidate the list which reduced the number of material matters to 14 with the introduction of one new material matter, ‘Corporate Governance’. Good governance is essential to successfully embed sustainability throughout an organisation and manage the opportunities and risks accordingly.
In light of the COVID-19 pandemic, the reassessment was conducted through an online workshop with members of the SC and SWG using Google Forms to compile the data. The new matrix developed has been reviewed and approved by the RMC. The materiality process was conducted and verified through work with an external consultant.
‘Quality Products and Services’ was ranked as our number one priority for the fourth consecutive year. The material matter ‘Safety and Health’ has increased in position when compared to last year’s matrix. This is an expected response to concerns surrounding the pandemic.
5 102-47: List of material topics OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 31 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Mapping our Material Matters
Land & General Berhad’s Materiality Matrix for FY2021
1
Critical 4 2
5 3
6 7 8
9
10
12 14 11
Importance to Stakeholders to Importance 13 Medium
Medium Importance to Business Operations Critical
Marketplace Workplace Community Environment
1 Quality Products and 4 Safety and Health 9 Local Community 10 Resource and Waste Services 7 Employee Development Contribution Management 2 Compliance and Well-Being 12 Climate Change 3 Anti-Corruption 8 Labour Practices 13 Water and Effluents 5 Economic Performance 14 Biodiversity 6 Corporate Governance 11 Supply Chain Management OVERVIEW CORPORATE GOVERNANCE 32 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Material Matter Stakeholders GRI Indicators UNSDGs Marketplace Quality Products and • Customers Non-GRI DECENT WORK 8 AND ECONOMIC Services • Parents and Students GROWTH • Shareholders and Investors
Compliance • Employees 307: Environmental Compliance • Government Agencies 419: Socioeconomic Compliance
Anti-Corruption • Government Agencies 102: General Disclosures • Shareholders and Investors 205: Anti-corruption
Economic • Shareholders and Investors 201: Economic Performance DECENT WORK 8 AND ECONOMIC Performance • Employees GROWTH
Corporate • Employees 102: General Disclosures Governance
Supply Chain 102: General Disclosures • Vendors and Suppliers DECENT WORK 8 AND ECONOMIC Management 204: Procurement Practices GROWTH
Environment Resource and Waste • Vendors and Suppliers 306: Waste SUSTAINABLE CITIES Management • Government Agencies 11 AND COMMUNITIES • Civil Society Organisations and Local Community
Climate Change • Civil Society Organisations and 201: Economic Performance SUSTAINABLE CITIES Local Community 302: Energy 11 AND COMMUNITIES 305: Emissions
Water and Effluents • Government Agencies 303: Water and Effluents SUSTAINABLE CITIES • Civil Society Organisations and 11 AND COMMUNITIES Local Community
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Material Matter Stakeholders GRI Indicators UNSDGs Environment Biodiversity • Civil Society Organisations and 304: Biodiversity Local Community • Government Agencies
Workplace Safety and Health • Employees 403: Occupational Health and • Vendors and Suppliers Safety • Government Agencies
Employee 401: Employment • Employees DECENT WORK 8 AND ECONOMIC Development and 404: Training and Education GROWTH Well-being 405: Diversity and Equal Opportunity Labour Practices • Employees 102: General Disclosures DECENT WORK • Government Agencies 202: Market Presence 8 AND ECONOMIC 401: Employment GROWTH 405: Diversity and Equal Opportunity Community Local Community • Civil Society Organisations and 413: Local Communities Contribution Local Community
MARKETPLACE
MARKETPLACE HIGHLIGHTS
Recorded 97% Achieved a Implemented customer satisfaction QLASSIC score Anti-Bribery at Sena Parc of 78% at Astoria and Corruption Ampang Framework OVERVIEW CORPORATE GOVERNANCE 34 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Quality Products and Services
Consistent delivery of high-quality products and services to consumers is our priority, and we do so by implementing a variety of measures across the divisions. Furthermore, we regularly engage with our consumers to better understand their concerns and expectations with regards to our product and service offerings.
“LAND & GENERAL CONTINUES TO GO FROM STRENGTH TO STRENGTH BOTH AS A DEVELOPER AS WELL AS IN THE EDUCATION SPACE. THEY FOCUS SO MUCH ATTENTION ON EACH INDIVIDUAL PROJECT - WHICH MAKES THEM STAND OUT FROM THEIR COMPETITION.” Stock Analyst, Alliance DBS
Property
To ensure our buyers are 100% satisfied with the quality of their homes, all units are carefully inspected by the Sales and Marketing (“S&M”) Team prior to the delivery of vacant possession by the Hand Over Vacant Possession (“HOVP”) Team. The handover process is also occasionally supervised by the S&M Team to ensure that it is conducted smoothly and in line with existing standard operating procedures. Most defect reports received are resolved within one month. In cases where rectification works may take longer due to manufacturer sourcing times, we maintain active communication with the purchaser to ensure they are informed of the progress.
“I HAVE PREVIOUSLY PURCHASED PROPERTY THROUGH A ‘ BIG NAME’ DEVELOPER, AND THEIR CUSTOMER SERVICE LEFT ME VERY UNSATISFIED. BUYING AT SENA PARC WAS MY FIRST EXPERIENCE WITH LAND & GENERAL AND I’M VERY HAPPY WITH EVERYTHING – THE QUALITY OF THE BUILDING AND THE FINISHINGS, AND THE POSITIVE INTERACTIONS WITH ALL LAND & GENERAL STAFF FROM START TO FINISH.” Customer, Sena Parc OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 35 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Moreover, we also conduct a HOVP Survey during the handover process to gauge overall customer satisfaction and identify any shortcomings during the construction and handover stages of our projects. The survey covers overall project quality and after sales services.
This reporting period, the HOVP Survey was conducted at Sena Parc, with 97% of customers satisfied with the project. At Astoria Ampang, there were not enough customers returning the HOVP survey to accurately report the outcome.
For the construction of our properties, we stipulate within contracts that all contractors are to achieve a minimum Quality Assessment System in Construction (“QLASSIC”) score of 75% for all main building works at each project site. This year, our Astoria Ampang project was assessed and awarded 78%. Sena Parc was not assessed for a QLASSIC score as the project was initiated before the contract stipulation was introduced.
“THE APP FOR REPORTING QLASSIC is a system utilised DEFECTS UPON HANDOVER by the Construction Industry Development Board to assess the IS VERY EFFECTIVE. THE workmanship quality of a building CUSTOMER SERVICE IS VERY construction work according to the Construction Industry Standard
GOOD.” QLASSIC ABOUT (CIS 7:2006) Customer, Astoria Ampang
Customers who have concerns or enquiries regarding the properties are encouraged to contact the S&M Team at [email protected]. The team will then channel feedback and complaints to the respective departments for resolution.
All our properties are designed and constructed following local authority requirements such as provision of adequate disabled-dedicated parking stalls and wheelchair ramps.
Education
SBPS
SBPS’ curriculum follows the National Primary School Curriculum (KSSR) and the National Secondary School Curriculum (KSSM), established by the Malaysian Ministry of Education. In addition, SBPS provides the following additional programs:
• Cambridge Lower Secondary Checkpoint; • International General Certificate of Secondary Education; • New South Wales Examination for English, Mathematics, Science and Information Communication Technology (ICT); • Dual Language Program (Malay and English); and • Education and Learning Support Academy for students with special needs.
SBPS has also been appointed by the Ministry of Education as an Inquiry Based Science Education Pilot Centre, and in that role, we have aligned our teaching practices with those of the renowned La main à la pâte Foundation in France which aims to enhance the quality of science and technology education in schools. OVERVIEW CORPORATE GOVERNANCE 36 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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SBIS
At SBIS, we provide holistic learning experiences to our students by adopting the following curricula:
EARLY YEARS International Early Years Curriculum (IEYC)
National (United Kingdom) Curriculum PRIMARY (Key Stage 1 and 2)
National (United Kingdom) Curriculum SECONDARY (Key Stage 3 and 4)
We also provide experiential learning opportunities outside the classroom to our students by establishing various program, such as:
M.A.D. (Making A My Little M.B.A. Difference) M.B.A. (Mind- Programmes SBIS Together Blowing with Tag Talk Outreach Adventures) Entrepreneur- Programme ship
• Inculcate a culture of • Expands students’ • Cultivates an • Inspires students giving among SBIS knowledge on entrepreneurial by introducing students by reaching existing economic mindset among them to successful out to those less market structure students individuals fortunate • Emphasis on • Provides first- who have faced • Established the SBIS Financial Literacy, hand experience adversity with grit boutique to generate Communication to industries and determination consistent funds for & Negotiation through case while coming into charity Skills and Product studies, analysis their own Science of business strategies, excursions, surveys and interviews OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 37 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Similar to SBPS, SBIS is evaluated according to the Standard Quality for Private Education Institution by the Ministry of Education. As an authorised Cambridge Assessment and International Education (“CAIE”) School, we are also subject to audits by CAIE representatives to ensure we comply with all the examination standard operating procedures.
We also conduct Parents’ Feedback Survey to gauge their satisfaction levels and evaluate our performance in managing the following nine aspects: Schoology (a virtual learning environment platform established to enable clear communication between parents and the school), Tutor-Ward system, course content, online learning, child’s progress in school, teachers, food and beverages, security, and cleanliness. In FY2021, 95% of parents indicated they were satisfied with all nine aspects.
If parents wish to submit complaints or other feedback, they are advised to reach out to tutors who will then highlight parents’ concerns directly to Management or contact Management via Schoology. Upon receiving complaints or concerns, school Management develop and implement measures to rectify the matter.
Plantation
Our Plantation Division is Malaysian Sustainable Palm Oil (“MSPO”) certified, demonstrating our commitment to produce quality sustainable palm oil. The plantations are subject to regular audits based on the requirements of the MS2530-3:2013 – General principles for oil palm plantations and organised smallholder standard. The MS2530-3:2013 standard outlines the seven (7) principles we need to adhere to:
Management commitment and Environment, natural resources, 1 responsibility 5 biodiversity and ecosystem services 2 Transparency 6 Best practices 3 Compliance to legal requirements 7 Development of new planting
Social responsibility, health, safety 4 and employment conditions
We ensure all oil palm fruit bunches are delivered to palm oil mills within 24 hours upon harvest. Daily meetings are conducted with our fruit harvesters to ensure they are aware of the procedures involved in harvesting fresh fruit bunches from trees. We also meet with palm oil mill managers regularly to discuss concerns and enquiries pertaining to the quality of our fresh fruit bunches. Additionally, palm oil mills provide quality check reports to review quality of the fresh fruit bunches received. Any concerns raised by palm oil mill managers are communicated to the Estate Manager for rectification. OVERVIEW CORPORATE GOVERNANCE 38 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Compliance (307-1, 419-1)6
Compliance with all laws and regulations is imperative for business continuity. Land & General endeavours to maintain compliance with all applicable laws and regulations. The laws and regulations we adhere to include:
• Companies Act 2016 • Town and Country Planning Act 1976 • Malaysian Anti-Corruption Commission Act 2009 • Federal Territory (Planning) Act 1982 • Environmental Quality Act 1974 • Highway Authority Malaysia (Incorporated) Act 1980 • Occupational Safety and Health Act 1994 • Perbadanan Putrajaya Act 1995 • Personal Data Protection Act 2010 • The Water Services Industry Act 2006 • Local Government Act 1976 • Malaysian Palm Oil Board Act 1998 • Employment Act 1955 • Education Act 1996 • Children and Young Persons (Employment) Act 1966 • Industrial Relationship Act 1997 • Coronavirus Disease 2019 (“COVID-19”) Act 2020 • Listing Requirements of Bursa Malaysia Securities Berhad • Housing Developers (Control and Licensing) • Capital Markets and Services Act 2007 (Amendment) Act 2015 • Securities Commission of Malaysia Act 1993 • National Land Code (Amendment) Act 2008 • Strata Titles Act 1985 • Strata Management Act 2013
Our Legal Department oversees the management of all legal affairs, including those at the subsidiary level, and ensures that the appropriate mechanisms have been established to safeguard compliance. Regular emails and reminders are sent to all employees to remind and reinforce the Group’s stance on matters of compliance. As a precautionary measure, all employees are required to provide written acknowledgement of their responsibilities in maintaining compliance during their tenure at Land & General. The written acknowledgement is submitted to the Group’s Human Resource and Legal departments for safekeeping.
For incidents of non-compliance that can be resolved at point of occurrence, Management will be responsible for conducting investigation and implementing mechanisms for resolution. In the event a significant incident of non-compliance is recorded, we have developed the following procedures at our corporate Headquarters (“HQ”) to carry out investigations into the matter.
Conduct preliminary Escalate case to the Engage external Approach regulator for investigation and fact Managing Director, Board consultants and lawyers, appeal or defense, or finding or Audit Committee for if necessary take matters to court further guidance
6 307-1: Non-compliances to environmental laws and regulations, 419-1: Non-compliance with laws and regulations in the social and economic area OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 39 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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At SBIS and SBPS, non-compliances must be reported to Senior Management at HQ. Matters are managed by the School Principals with assistance from Legal and Senior Management. Upon receiving information about a non-compliance, a review of the relevant standard operating procedures is conducted to avoid reoccurrence of the non-compliance.
Potential cases of non-compliance at our plantation operations are communicated directly to the Estate Manager, who will inform Senior Management of the details pertaining to the incident. Then, an internal investigation is conducted and mitigative measures are developed to prevent reoccurrence.
Land & General recorded one case of non-compliance with regulations this reporting year. The non-conformity was identified at our Plantation Division, regarding the inadequate storage facilities and segregation of waste types. The non-conformity was addressed promptly with upgrades to our chemical waste store. Additional training on our waste management practices has also been implemented for plantation staff, to prevent similar non-conformities in the future. No other incidents of non- compliance with environmental or socio-economic standards were recorded. The Group’s Compliance KPI is zero stop work orders from DOE and DOSH in FY2021, and since the non-compliance at the Plantation Division was unrelated to the Group’s Compliance KPI, the Group considers that it has achieved its Compliance KPI as it did not receive any stop work order from DOE and DOSH in FY2021.
Anti-Corruption (102-17, 205-1, 205-2, 205-3)7
As part of our commitment to conduct business in an ethical manner, we have implemented our Anti-Bribery and Corruption (“ABAC”) Framework and Policy, which came into effect in June 2020 under the purview of the Board. The framework and policy were prepared in accordance with the requirements of Section 17A of the Malaysian Anti-Corruption Commission Act (2009), with reference to the Guidelines on Adequate Procedures issued by the Prime Minister’s Department.
In addition to the ABAC Policy, the framework is supported by the following:
• Business Incentives Policy; • Donation and Sponsorship Policy; • Facilitation Payment Policy; • Gift, Entertainment, Hospitality and Travel Policy; and • Whistleblowing Policy and Procedures.
To familiarise Directors and employees with the ABAC framework and policy, we engaged external consultants to conduct in-house training. We also collaborate with regulatory bodies to conduct briefing sessions for Directors and Management on changes in the regulatory landscape pertaining to anti-corruption practices. This year, anti-corruption training was conducted using open discussions and a workshop. 29 employees participated in the external ABAC training programmes. Upon completion, they communicate training materials to our remaining workforce through internal training and briefing sessions across all divisions.
As part of the implementation, the ABAC Policy and the Business Code of Ethics were emailed to our more significant vendors, suppliers and contractors by the respective Head of Departments, and where possible, we obtained acknowledgement from those parties. The policy is sent to intermediaries (i.e., business partners, vendors, suppliers and contractors) on an annual or biennial basis depending on their risk profiles.
7 102-17: Mechanisms for advice and concerns about ethics, 205-1: Operations assessed for risks related to corruption, 205-2: Communication and training about anti-corruption policies and procedures, 205-3: Confirmed incidents of corruption and actions taken OVERVIEW CORPORATE GOVERNANCE 40 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The ABAC Framework requires all operations to undergo an annual bribery and corruption risk assessment. The Framework outlines the process under which risks are to be identified, assessed and managed. Once the assessment is completed, Land & General will record findings in a risk register, detailing the risk, its description, causes and consequences, existing controls, impact and likelihood, and risk mitigation plan, if any.
Furthermore, for all new business partners, we undertake a corruption due diligence exercise to evaluate the potential partner for prior history of non-compliances relating to bribery and corruption. By doing so, we take an active stance in managing our exposure to corruption and bribery risks.
In the unfortunate event an incident of corruption is identified within the Group, individuals shall utilise the Whistleblowing Policy and Procedure to report the occurrence. Incidents pertaining to bribery and corruption will be brought to the attention of the Audit Committee. The Committee will then appoint independent personnel, upon thorough deliberation, to undertake investigation on the matter. In FY2021, we recorded zero incidents of bribery and corruption via our whistle-blowing channel and incurred no fines pertaining to corruption and bribery across the organisation.
Economic Performance (201-1)8
FY2021 was an unprecedented year for all businesses as the COVID-19 pandemic affected global markets and economies. Below is a list of the economic and financial challenges faced by each of the Group’s divisions.
ECONOMIC CHALLENGES FACED:
PROPERTY Weak market High inventory Tenancy sentiment levels risk
SBPS: SBIS: EDUCATION Student withdrawal Reduction in foreign Payment default student enrolment
Difficulty in obtaining Low yield from oil PLANTATION skilled labour for harvesting palm trees fresh fruit bunches
8 201-1: Direct economic value generated and distributed OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 41 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The challenges reinforced our drive to remain economically resilient and to address these challenges, Land & General developed business strategies and/or risk mitigative measures across each division. Some of these strategies and measures were:
PROPERTY EDUCATION PLANTATION To address the weak market FY2021 proved to be a challenging In response to low crop-yield for oil sentiment and high inventory levels year for our schools as they were not palm, we established a fertilising faced by the Property Division, we permitted to physically open due to the program to address the issue in the plan to develop more medium to COVID-19 pandemic. We utilised online coming years. low-medium cost units as demand platforms to conduct online teaching We have also started planting bamboo for properties within this segment and learning to ensure classes were not to replace our low-yielding old rubber is still high. With regard to tenancy disrupted. trees. risks, we are planning to consolidate To minimise financial stress on parents all investment properties under one during the pandemic, both SBPS and company so that the leasing team SBIS have not increased school fees therein can give it a better focus. for the academic year, and allowed fee payments in instalments. In addition, unutilised fees for meal plans and extra- curricular activities were refunded.
Despite the challenges faced, the Board of Directors has recommended payment of 0.5 sen per share in dividends for FY2021, to reward our shareholders for their loyal support to L&G Group.
Further information on Land & General’s financial performance for FY2021 can be found on pages 88 to 174 of this Annual Report.
Corporate Governance (102-16, 102-18)9
To safeguard the integrity of our business and our reputation as a trusted company, we uphold high standards of professionalism across our organisation. Those at the top lead by example and conduct affairs in an honest and transparent manner.
The Board of Directors (“the Board”) is guided by an internal Board Charter (“the Charter”) which has been established according to the principles of the MCCG. The Charter serves to inform each Director of their roles and responsibilities during their term with Land & General, and outlines the standards of professional behaviour expected from Directors. These expectations are described in the Code of Conduct for Directors which can be found in the Charter. Land & General’s Board Charter is reviewed regularly by the Board to ensure relevance and suitability with the latest regulatory requirements. The Charter was last updated in May 2020.
Furthermore, we strongly believe that diversity in the leadership team supports good corporate governance and strategic decision making. We do not discriminate when appointing Directors and select them strictly on the basis of merit, capability, experience, skill-set and integrity.
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Employees are guided by the Group’s Code of Conduct and Ethical Practice (“the Code”). It describes the professional behaviour that is expected of all employees during their tenure at Land & General. All employees are made aware of the Code upon commencement through a briefing session during their induction program. Regular reviews of the Code are conducted by the Board and Management to ensure its effectiveness. This reporting period, the Code was reviewed and updated in May 2020.
The Code is supplemented by the following policies to foster a culture of integrity in our workforce:
• Anti-Bribery and Corruption Policy • Gift, Entertainment, Hospitality and Travel Policy • Donation and Sponsorship Policy • Conflict of Interest Policy • Whistleblowing Policy and Procedure • The Group’s Rules and Regulations
To ensure employees have read and understood the Charter and Code, they are required to submit written acknowledgement upon commencing employment.
Furthermore, we provide all third parties a Code of Business Ethics which details the Group’s expectations of external parties when conducting business with Land & General. The Code of Business Ethics addresses anti-bribery and corruption, conflict of interest and regulatory compliance. It is communicated by Heads of Departments to key suppliers and contractors by email.
Reporting Channels
The Group’s Whistle-blowing Policy and Procedure provide individuals a channel to submit complaints about improper conduct in Land & General. Throughout the process, the whistle-blower’s identity is kept confidential to prevent any form of retaliation or harassment. All incidents must be reported by email to [email protected] or by writing to the Senior Independent Director.
Once an incident is reported, the Group’s Compliance Officer is responsible for documenting all whistle-blowing disclosures received and if required, obtain follow-up information. The policy is overseen by the Audit Committee who is responsible for reviewing and ensuring it remains an effective and transparent reporting channel for all.
In addition to the Whistle-blowing Policy and Procedure, grievances pertaining to improper business conduct can be submitted through our corporate website.
This year, zero incident of unethical conduct were reported through the Group’s Whistle-blowing Policy and Procedure. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 43 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Supply Chain Management (102-9, 204-1)10
As a conscientious business, we look to support the local economy by providing business opportunities to local business whenever possible. The Group has established a KPI targeting to spend 65% of our procurement budget on Malaysian entities. This year, however, our procurement expenditure amounted to RM40,773,122, with only 60% of the budget spent on local Malaysian businesses. This decrease compared to previous years is partly attributable to the refinement of our definition for “local” products, which has been widened to exclude more products that were manufactured overseas, even if they were purchased through Malaysian entities, and which may have been erroneously reported as “local” in the previous years.
AMOUNT SPENT ON LOCAL AND FOREIGN SUPPLIERS (RM) Local RM24,629,077 60% Foreign RM16,144,045 40% 2021
The figure above displays aggregates of Property and Plantation divisions’ procurement expenditure.
ENVIRONMENT
ENVIRONMENT HIGHLIGHTS
Reduced electricity Recycled 491 kg Implemented and water of waste at HQ measures to protect consumption biodiversity at plantation and construction sites
10 102-9: Supply chain, 204-1: Proportion of spending on local suppliers OVERVIEW CORPORATE GOVERNANCE 44 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Resource and Waste Management (306-3, 306-4, 306-5)11
Land & General recognises that poor resource and waste management practices will negatively impact our business and the environment in the long-term. Our efforts to limit our environmental footprint include incorporating 3R (Reduce, Reuse and Recycle) practices in our activities and ensuring all wastes generated are recovered or disposed of in line with the Environmental Quality Act 1974 and its supporting regulations. We are committed to reducing our consumption of resources, in turn reducing the waste and pollution generated by our operations.
At our corporate offices, we encourage employees to recycle and have placed recycling bins throughout the offices. This year we recycled 491 kg of waste, a 39% increase from the previous year. 96% of total waste recycled was paper, followed by metal scrap (3%) and plastics (1%).
TYPES OF WASTE RECYCLED (KG) Plastic 5kg 1% Metal Scrap 14kg Paper 3% 2021 472kg 96%
Property
The Group implements KPIs to ensure we remain accountable for our waste management practices. This reporting period, we have met both targets set; firstly for all construction wastes to be disposed at authorised landfills, and secondly to recover 80% of scrap metal used for construction.
“ IT IS IMPOSSIBLE TO STOP WASTE ENTIRELY AT THE CONSTRUCTION SITE, HOWEVER, THE 3R SYSTEM (REDUCE, REUSE, RECYCLE) HELPS US CONTROL WASTE QUANTITY AT SITE. THIS HELPS TO REDUCE POLLUTION AS WELL AS REDUCE THE NEED FOR A LANDFILL.” Construction Contractor, Damansara Seresta
11 306-3: Waste generated, 306-4: Waste diverted from disposal, 306-5: Waste directed to disposal OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 45 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Where possible, we look to minimise material consumption. We continue to use aluminium formwork for our projects, rather than timber as the former can be recycled and reused. This year, we sent 8,840 kg of scrap metal to an external contractor for recycling.
“THE TEACHERS FREQUENTLY DISCUSS SUSTAINABILITY AND PEOPLE FROM THE ECO COMMUNITY ARE INVITED TO THE SCHOOL TO GIVE TALKS. THE MOST INTERESTING THING I LEARNED WAS THAT RECYCLING ONE BOTTLE CAN SAVE ENOUGH ENERGY TO RUN YOUR TV FOR THREE HOURS. EVERY SINGLE PIECE OF RUBBISH COUNTS.” Student at SBIS, Age 15
Education
SBPS and SBIS aim to foster a future generation that is eco-conscious by educating students on proper recycling etiquette and to discern recyclable from non-recyclable materials. The recyclables are collected from recycle bins placed around the campuses and from students’ households with the help of parents.
We have also embarked on a long-term EcoBricks12 project at SBIS. The project aims to reduce plastic waste by repurposing them as building material. The project has garnered positive feedback from our students and we look to continue implementing such projects in the future.
“I THINK IT’S IMPORTANT THAT STUDENTS ARE EDUCATED ABOUT SUSTAINABILITY AND THE ENVIRONMENT. WHAT REALLY STANDS OUT TO ME AT SBPS ARE THE RECYCLING INITIATIVES – THEY EVEN HAVE A PROGRAM TO RECYCLE CLOTH AND TEXTILES.” Parent of SBPS Student
12 EcoBricks are plastic bottles which have been filled with used pieces of plastics to be utilised as building material to create structures, furniture and more OVERVIEW CORPORATE GOVERNANCE 46 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Due to restrictions imposed by the COVID-19 pandemic, SBPS continued to implement waste management initiatives from previous years. These include:
Collaborated with iCYCLE Malaysia to promote recycling of e-wastes among students
Worked with the Global Environmental Implemented a Kloth Centre (“GEC”) to raise Care bin on campus to awareness of the benefits encourage cloth and of effective recycling fabric recycling practices
Plantation
Waste management practices at our plantations are guided by MSPO Sustainability and Environmental policies. These policies attest to our commitment in best practices when managing wastes and promoting awareness on environmental conservation.
This year, the plantation generated 8.4 tonnes of waste, of which 65% was plant material by-products generated from the processing of fresh fruit bunches. We do not dispose of these by-products but reinput them into the field as compost.
Climate Change (201-2, 302-1, 302-3, 302-4, 305-1, 305-2, 305-5)13
Climate change poses a potential long-term risk to the environment and to our business. The Risk Management Committee has classified climate change as a “business disruption” risk. In response, the RMC has advised Management that a business continuity plan, outlining mitigative procedures in the event of business disruptions must be in place. The RMC reports directly to the Board regarding the management of climate change and other identified risks.
At Land & General, we are committed to reducing our GHG emissions to address the issue of climate change. This year, we embarked on efforts to calculate and report GHG emissions. The emissions reported include scope 1 (direct emissions from the burning of carbon fuel sources such as petrol and diesel) and scope 2 (emissions produced from the consumption of grid electricity) carbon emissions, calculated using an emission factor14.
13 201-2: Financial implications and other risks and opportunities due to climate change, 302-1: Energy consumption within the organisation, 302-3: Energy intensity, 302-4: Reduction of energy consumption, 305-1: Direct (Scope 1) GHG emissions, 305-2: Energy indirect (Scope 2) GHG emissions, 305-5: Reduction of GHG emissions 14 Emissions from carbon fuel sources have been calculated using emission factors from the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. Emissions from grid electricity have been calculated using the emission factor for Peninsular Malaysia from the 2017 CDM Electricity Baseline for Malaysia by the Malaysia Green Technology Corporation. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 47 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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We saw a decrease in our electricity consumption this year. It is acknowledged that the decrease is partly attributable to the various periods of MCO restrictions experienced this year, which resulted in office and school closures. Moving forward, we strive to maintain a decrease in electricity consumption from pre-MCO levels, as operations return under the “new normal”.
Our total CO2 emissions appear greater this year due to the inclusion of emissions data from the property development sites, which was unavailable in previous years.
Our total emissions from all divisions for FY2021 were 1,159.0 tonnes CO2.
TOTAL EMISSIONS (TONNES CO2) SCOPE 1 & 2 EMISSIONS (TONNES CO2)
Scope 1
Scope 2 29.7 853.1 27.4 1,093.8 35.6 1,123.4 882.8 1,121.2 1,159.0
‘19 ‘2015 ‘21 ‘19 ‘20 ‘21
Property
Scope 2 emissions make up a significant portion of our carbon footprint. To reduce our electricity consumption at HQ and the sales galleries, we replaced all fluorescent lightbulbs with Light-Emitting Diode (“LED”), and encourage staff to turn off lights, computers, and appliances when not in use.
Education
In the schools, we continued to replace fluorescent bulbs with energy-efficient LED lights. At SBIS, we have several systems of timers which activate lights, air conditioners, and the pump for the swimming pool. These timers ensure lights and other appliances are only turned on when necessary, thereby reducing energy wastage.
Plantation
At the plantation estate, we conduct regular maintenance of our tractors which ensures the machines are running at maximum engine efficiency. We also avoid using mechanical fruit-bunch grabbers, further reducing our reliance on fuel. The division enforces a firm zero-burning policy, which eliminates both the air pollution caused by smoke and also the release of carbon into the atmosphere. In the office, we replaced the fluorescent bulbs with LED lights.
15 GHG data for FY2019 and FY2020 do not include property development sites as data was not available for these years OVERVIEW CORPORATE GOVERNANCE 48 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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This year, our total electricity consumption was 4,977,727 MJ16, a decrease from the previous year.
ELECTRICITY CONSUMPTION ELECTRICITY INTENSITY ELECTRICITY CONSUMPTION AT BY GROUP (MJ) BY GROUP (MJ/SQM) PROPERTY SITES FY2021 (MJ)
402.2 365.9 303.1
228.4 188.8 236.4
38.1 52.3 38.8 465,181 791,507 35,942 870.3 2,193.1 1,698.3 840.8 3,009.7 2,254.2 695.0 2,232.0 2,050.8
FY‘19 FY‘20 FY‘21 FY‘19 FY‘20 FY‘21 Astoria Seresta Plantation HQ & Sales HQ & Sales Plantation Ampang Galleries Sena Parc Galleries Damansara Education Education
Water and Effluents (303-3, 303-4, 303-5)17
Water is a valuable global resource and we monitor our operations carefully to ensure water is being used in a responsible manner.
Property
At HQ, sales galleries and development sites, water bills are carefully monitored to identify any discrepancies so that they can be promptly rectified. At the construction sites, water consumption generally varies with different stages of development.
To ensure excessive sediments are not released into any waterways surrounding our property development sites, surface water is collected in a silt trap before being discharged. All sites follow the requirements of the respective local authorities (Majlis Bandaraya Seremban, Majlis Perbandaran Ampang Jaya, and Majlis Bandaraya Petaling Jaya) regarding water discharge at construction sites.
None of our projects are located in water-stressed regions.
Education
At our schools, students are taught the importance of conserving water and how they can practise water conservation. At SBPS, the faucets are fitted with aerators which reduce the total water flow, and toilets are fitted with “bottle in the tank” systems which reduces the water used per flush. At SBIS, we monitor the water bills and perform walkovers of the school grounds so that any leakages can be identified and rectified promptly. We also adjusted the swimming pool backwashing schedule so that it is performed fortnightly instead of weekly. We found this was sufficient for keeping the pool clean while halving the volume of water required.
16 This value inclusive of HQ, Sales Galleries, Plantation and Education Divisions. Electricity consumption from the construction sites is reported separately below. 17 303-3: Water withdrawal, 303-4: Water discharge, 303-5: Water consumption. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 49 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Plantation
Crop trees receive a significant amount of water from rainfall. The remaining water required for irrigation is abstracted surface water from a stream running through the estate. Water abstracted from the stream for our purposes is recorded and monitored. This year a total of 14,623.5m3 of water was withdrawn from the stream, representing a 6.4% decrease from last year’s abstraction volume of 15,623.7m3. Waste water discharge from the estate workers’ accommodation is directed to domestic septic tanks, not the nearby waterways.
WATER CONSUMPTION WATER INTENSITY WATER CONSUMPTION AT BY GROUP (M3) BY GROUP (M3/SQM) PROPERTY SITES FY2021 (M3)
4.85 4.24 3.97
1.48 1.17 0.95 0.38
0.55 12,096 10,272 2,661 17,867 23,242 5,322 15,624 31,631 6,572 14,624 21,876 8,309 0.40 FY‘19 FY‘20 FY‘21 FY‘19 FY‘20 FY‘21 Astoria Seresta Plantation HQ & Sales HQ & Sales Plantation Ampang Galleries Sena Parc Galleries Damansara Education Education
Biodiversity (304-1, 304-2, 304-3)18
Property
As a property developer, we are aware our operations have a direct impact on the natural environment when land is cleared for property development. Our developments are specifically built in areas without high biodiversity, to avoid destroying high-value native vegetation or habitat. At all our on-going development sites, we implement strict procedures to ensure our operations do not pollute or infringe on the surrounding environment, particularly neighbouring forests such as the Bukit Lanjan Forest Reserve next to Damansara Seresta.
• To prevent water pollution and sedimentation, silt traps are installed to catch any soil, debris, or pollutants and prevent them from entering the surrounding waterways. • Vehicle washing stations are used at all sites to remove excess sediment from the vehicle body and tyres before the vehicles can return to main roads. This prevents the spread of soil, dust, and pollutants beyond the site perimeter. • Dust netting is erected to reduce air pollution and prevent excessive dust particles escaping into the surrounding environment. It also works to prevent debris from dropping into the site below and accumulating as litter.
18 304-1: Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas, 304-2: Significant impacts of activities, products, and services on biodiversity, 304-3: Habitats protected or restored. OVERVIEW CORPORATE GOVERNANCE 50 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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“I LOVE THE INCLUSION OF GREEN SPACE AT THE PROPERTY – WHERE MOST OTHER DEVELOPERS WOULD FILL WITH CEMENT, LAND & GENERAL HAVE CREATED A GARDENING SPACE.” Customer, Sena Parc
Our designs incorporate elements of nature and biodiversity into our properties. Some examples include our forest trail at Damansara Seresta, the water terraces at Astoria Ampang, and eight parks at Sena Parc. A statement feature at Damansara Seresta is a 7-metre cascading waterfall, and Astoria Ampang also contains landscaped marshland and a long water stream. These green features provide refuge for birds, butterflies, and other wildlife, while also providing space for residents to relax and reconnect with the natural environment.
“DEVELOPERS NEED TO INCORPORATE SUSTAINABILITY AND GREEN FEATURES TO STAND OUT FROM OTHER DEVELOPMENTS.” Customer, Astoria Ampang The “forest trail” area available to future residents of Damansara Seresta
Education
At SBPS, our Eco Team manage the school’s “Edible Garden”. Since planting and maintaining the garden, we have observed a notable increase in birds and grasshoppers, much to the delight of our students. We also collaborate with the Malaysian Nature Society (“MNS”) on conservation and biodiversity projects. As a registered member of MNS, we conduct environmental education programs with MNS providing program structures and expertise. Occasionally, our students are invited to participate in conservation activities organised by MNS.
Moving into the next two years, the school has a plan to collaborate with Zoo Negara on their “Zoo in School” program, which creates further awareness and appreciation of the unique biodiversity in Malaysia and around the world.
Plantation
Adjacent to our plantation estate lies Bukit Tarek Forest Reserve and we ensure our operations do not have any negative impacts on the forest reserve. We avoid spraying pesticides or fertilisers along our boundary with the forest reserve. To ensure there is no harmful run-off from our estate which could enter the nearby Sungai Kerling, we only apply fertilisers and pesticides on dry, sunny days. Our plantation does not extend across any protected peat swamp areas. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 51 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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WORKPLACE
WORKPLACE HIGHLIGHTS
Recorded 3,834 Established 60% female training hours in effective measures employees in our FY2021 in response to the workforce, including COVID-19 pandemic 42% in management roles or higher
Safety and Health (403-1, 403-2, 403-4, 403-5, 403-9)19
We have an established OSHA Committee at the Headquarters and Property Division, an OSHA structure at the Plantation Division, and Emergency Response Teams (“ERTs”) at the Education Division. Both the OSHA Committee and the ERTs assign specific staff members to roles which they will assume in the event of an emergency or incident, including first aider or fire warden.
At the headquarters and property offices, an internal OSHA audit form is used for reporting hazards so that identified risks may be promptly addressed. At the schools, reports on risks and hazards are made using Google Forms which allows the time, date, observations, and timeline to be effectively tracked and managed. The maintenance team regularly make rounds of the school facilities, to pre-emptively watch for and identify hazards that could pose a risk to health and safety.
“AS REQUIRED BY LAND & GENERAL, WE SUBMIT A SAFETY & HEALTH IMPLEMENTATION PROGRAMME THAT INCLUDES, HEALTH, SAFETY, AND ENVIRONMENT PROCEDURES AS WELL AS TRAINING, INDUCTION, AND REGULAR COMMUNICATION.” Construction Contractor, Damansara Seresta
19 403-1: Occupational health and safety management system, 403-2: Hazard identification, risk assessment, and incident investigation, 403-4: Worker participation, consultation, and communication on occupational health and safety, 403-5: Worker training on occupational health and safety, 403-9: Work related injuries. OVERVIEW CORPORATE GOVERNANCE 52 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Safety Training
In the offices, staff received different types of Safety and Health training this year, including:
1. Fire and Emergency Response Plans briefing to OSHA Committee 2. Formation of the Buddy System 3. Formation and role of the COVID-19 Prevention Committee
At the construction sites, staff participate in regular toolbox meetings which cover all health and safety responsibilities relating to the site. All construction workers participate in a safety induction before being permitted to start work on the site. Workers also receive safety training relevant to their specific construction activities, including site security training, passenger hoist operation training, materials lifting training, housekeeping and material arrangement, and working at heights awareness. This year, COVID-19 awareness training was also delivered.
At the plantation estate, all workers attended a special fire awareness training which included fire extinguisher training. Workers were also provided Hazard Identification, Risk Assessment and Control (HIRARC), chemical handling, first-aid, and cardiopulmonary resuscitation (CPR) training.
Plantation estate staff receive fire extinguisher and CPR training
Our health and safety statistics for the year are reported below. This year, we suffered a lost-time injury frequency rate (“LTIFR”) of 1.52 injuries per million hours worked20. This rate was the result of four (4) injuries, two (2) at the plantation estate and two (2) at the Astoria Ampang construction site. We are pleased to report no workplace fatalities this year, nor in the previous three reporting years.
To prevent recurrence of incidents which cause injury, at the Astoria Ampang site, the contractor’s Safety Officer engaged all staff in a site safety awareness refreshment training. At the Plantation, additional signage was placed at the incident location to remind staff to be vigilant when walking across slippery floors.
Division Total Working Hours Lost Time Injuries First-aid Injuries Fatalities HQ and Sales Galleries 227,136 0 0 0 Property 1,016,108 2 29 0 Education 717,244 0 0 0 Plantation 124,800 2 2 0
20 Rates are calculated per million working hours as described by the International Labour Organisation. LTIFR = [no. lost time injuries x 1,000,000] / [total working hours] OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 53 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Our Response to the COVID-19 Pandemic
The impact of the COVID-19 pandemic has been felt across all divisions at Land & General. This year, we experienced a range of impacts including:
• No dividends declared for FY2020. • Utility costs reduced at the HQ office for periods of time due to the MCO closures. CORPORATE • Salary increments and bonuses for staff were placed on hold. • Annual leave entitlement for staff temporarily reduced by 30%
• Sales galleries and construction sites were closed intermittently due to the MCO. PROPERTY • Customer bookings increased during the MCO, but conversion into sales remain challenging. • Rental incomes were affected as tenants requested rent waivers.
• Schools were closed intermittently. • Student withdrawals increased due to financial difficulties brought on by the MCO. To EDUCATION assist those families experiencing difficulty, we implemented an instalment payment scheme for school fees.
• Harvesting from plantation was affected as we were not able to recruit more foreign PLANTATION workers to harvest.
To address the complex issues brought on by the pandemic, we formed the COVID-19 Committee. The Committee addresses impacts and plans contingency measures so we are prepared for any future disruptions. The responsibilities of the COVID-19 Committee include:
• Ensuring compliance with directives from DOSH, authorities such as the Ministry of International Trade and Industry, and other statutory requirements. • Appointing one member to operate within each OSHA Committee and respond to COVID-19 related inquires and issues. • Developing, monitoring, and enforcing Standard Operating Produres (“SOPs”) in the workplace as well as for customers and buyers visiting our locations. • Educating staff on health and safety issues related to COVID-19. • Investigating any complaints received from staff.
Across our offices, sales galleries, schools, and at the plantation estate, we followed government SOPs. We provided hand sanitisers throughout our operations. Personal protective equipment, including face masks and gloves were provided to front-line staff working at the reception and security counters. We were pleased to find that our staff and students were quick to adapt to the “new normal” of online work and teaching. OVERVIEW CORPORATE GOVERNANCE 54 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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“I FELT VERY COMFORTABLE WITH HOW LAND & GENERAL MANAGED THE COVID-19 PANDEMIC. ALL SOPS WERE FOLLOWED, AND STAFF WERE PERMITTED TO WORK FROM HOME IF THEY PREFER.” Land & General employee of 18 years
Unfortunately, one teacher at SBIS tested positive for COVID-19 this year. The school responded promptly, arranging for all teachers and staff to undergo a swab test and liaising with MOH as required. The school was closed for sanitisation and deep cleaning of the entire campus. The school kept regular and open communication with parents via its Virtual Environment Platform (Schoology). To show our support during the stressful situation, we arranged counselling sessions for the teacher who contracted COVID-19, as well as for our students who might have found the situation stressful.
Thankfully, no other staff members or students tested positive, indicating no transmission to the rest of the school. We attribute this to our strict adherence to safety and health guidelines, and SOPs.
Employee Development and Well-Being (401-2, 401-3, 404-1)21
Employees are our most important asset. At the heart of our long-term value creation plan for the L&G Group is investments in our present employees.
Staff received a total training of 3,834 hours this year, with an average of 16 hours per employee in the Education Division, 10 hours at the Plantation Division, and 3.0 hours at HQ and Property Division. The decrease in training hours (down 10.8% from last year) is because of the gathering restrictions to contain the spread of the contagion, limiting our ability to hold training sessions. A breakdown of our average training hours for the past three years is displayed below:
AVERAGE TRAINING HOURS PER AVERAGE TRAINING HOURS BY AVERAGE TRAINING HOURS BY EMPLOYEE - ALL DIVISIONS GENDER - HQ & PROPERTY DIVISION EMPLOYEE CATEGORY - HQ & PROPERTY DIVISION 8.4 5.1 6.1 3.1 3.1 2.97 27.8 18.8 3.8 10.5 7.6 4.5 11.7 9.44 0.77 16 6.3 0 16 4.7 0 16 3 10
FY‘19 FY‘20 FY‘21 FY‘19 FY‘20 FY‘21 FY‘19 FY‘20 FY‘21
Education HQ & Sales Men Women Senior Management Galleries Management Plantation Executive
21 401-2: Benefits provided to full-time employees that are not provided to temporary or part-time employees, 401-3: Parental leave, 404-1: Average hours of training per year per employee OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 55 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Staff Benefits and Engagement
We believe healthy and motivated employees are productive, which is why we focus on providing healthcare and employee benefits in accordance with local law.
“LAND & GENERAL IS VERY SUPPORTIVE OF WORK-LIFE BALANCE AMONG THE STAFF. THEY ENCOURAGE REGULAR BREAKS TO PREVENT BURNOUT AND INCREASE PRODUCTIVITY.” Land & General employee of 2 years
We are committed to providing our staff with work-life balance, and it is our policy to comply with local laws regarding standard working hours and overtime. Our overtime policy states “excessive or continuing use of overtime can have serious consequences on the health and morale of the staff. Unless it is really necessary and vital, overtime shall be reduced to minimum. Managers shall monitor and control overtime work so as not to be extravagant, wasteful and at the same time detrimental to staff health.” Annual leave, study leave, parental leave, and compassionate leave are available to all our staff. This reporting period, five (5) female and one (1) male staff member took parental leave.
Labour Practices (102-8, 202-2, 401-1, 405-1, 405-2)22
The diversity of our team provides different perspectives, bringing value to our business and customers. At L&G, we embrace workplace diversity and our hiring practices and opportunities for career development are based on merit, without bias on matters relating to ethnicity, religion, age, gender, nationality, or disability. Our workforce is made of 95.6% Malaysian citizens, and 100% of Senior Management is Malaysian.
This year, we adopted the United Nations Sustainable Development Goal 5: Gender Equality. We are proud to report that our staff is 60% women, including 42% women in management roles or higher. This percentage is in part a reflection of the high number of female staff employed as teachers at our schools.
The Group adheres to the National Minimum Wages Order (Amendment) 2018, ensuring compliance with local minimum wage. The salary ratio for men: women in Senior Management is 1.03 : 1.00, meaning for every RM1 a woman in Senior Management earns, a man earns RM1.03. The salary ratio for men : women is 1.18 : 1.09 for Management, 1.01 : 1.23 for Executive, and 1.14 : 1.04 for Non-executive.
22 102-8: Information on employees and other workers, 202-2: Proportion of senior management hired from the local community, 401-1: New employee hires and employee turnover, 405-1: Diversity of governance bodies and employees, 405-2: Ratio of basic salary and remuneration of women to men. OVERVIEW CORPORATE GOVERNANCE 56 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Workforce by Gender
38% 36% 40%
FY2019 FY2020 FY2021
62% 64% 60%
Men Women
Workforce by Age Group
The majority of our employees (59%) are in the 30-50 years age group. This age group represents employees with diverse and robust industry experience, whom we can further develop to ensure a strong and sustainable leadership pipeline. We also seek to hire upcoming young talent, to unlock their potential and provide opportunities for them to drive the business into the future.
24% 22% 23% 26% 19% 22%
FY2019 FY2020 FY2021
54% 51% 59%
<30 years 30 – 50 years >50 years OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 57 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Workforce by Employment Type
Throughout the Group, only two (2) staff members at SBIS fall under the category of contractor or temporary staff, representing 0.5% of the total workforce23. The rest of our workforce comprises permanent staff.
12% 5% 11% 4% 24% 3%
11% 10% 8% FY2019 FY2020 FY2021
72% 75% 65%
Senior Management Management Executive Non-executive
Employee Hires and Turnover
This year, we recruited 56 new staff members, and recorded 35 resignations, for a turnover rate of 9.6%. While our hiring rate has slowed this year due to the impacts of COVID-19 on the business, our turnover rate has also decreased in comparison to last year. This indicates good talent retention despite the challenges brought about by the pandemic. New hires and turnover data for the last three (3) years are presented below.
NEW EMPLOYEE HIRES EMPLOYEE TURNOVER 33 29 62 20 27 29 16 8 26 12 21 14
(19.7%) (24.5%) (15.3%) (7.6%) (11.3%) (9.6%) FY‘19 FY‘20 FY‘21 FY‘19 FY‘20 FY‘21
Women Men Women Men
*hiring and turnover rates indicated in parenthesis
23 This value does not include construction workers as their employment is overseen by the appointed construction contractor. OVERVIEW CORPORATE GOVERNANCE 58 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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COMMUNITY
COMMUNITY HIGHLIGHTS
Engaged with the Donated RM542,000 local community in monetary donations to COVID-19 relief and community infrastructure
Local Community Contribution (413-1)24
At Land & General, we have always realised the importance of giving back to our local community. Given the disproportionate impact of the COVID-19 pandemic on the more vulnerable sections of society, we have focused our community efforts this year to help and support them.
At HQ, our staff enthusiastically participated in the Rice Bucket Challenge by the Lost Food Project. The program aims to raise awareness on food security and food wastage, and highlights just how much valuable food products end up in the landfill. Our generous staff collected over 340kg of food and essentials to donate to help address hunger and poverty in the community.
Land & General employees proudly display their contributions collected for the Lost Food Project.
24 413-1: Operations with local community engagement, impact assessments, and development programs. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 59 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Plantation staff assist with upkeep at the local police station Students at SBIS showed their appreciation for COVID-19 front-liners with a cheerful cake
Plantation staff assists with unload- ing essential supplies donated to RELA
Education
Within the Education Division, we unfortunately had to cancel several of our planned engagement programs due to COVID-19 restrictions. However, SBIS students contributed to buy an appreciation cake for the front-liners working at the Petaling District Health Office. The students also raised over RM3,000 for PichaEats while participating virtually in their “It’s a Wrap” education and fundraising session. PichaEats’ mission is to empower Malaysia’s refugee community through its food business.
Plantation
At the Plantation Division, our staff banded together to help with maintenance and upkeep of the local police station. We donated groceries and essential items to the police station and to RELA (People’s Volunteer Corps) to show our appreciation for their hard work during the MCO.
In addition to these programs, the Group donated RM30,000 to The Edge COVID-19 Emergency Fund, to provide immediate relief to healthcare workers and communities most impacted by the pandemic; and RM12,000 to a golf event, which benefits welfare homes. Through our subsidiary, Xtreme Meridian Sdn Bhd, we made a RM500,000 contribution to Majlis Perbandaran Ampang Jaya to construct and upgrade public facilities, showing our commitment to improve and regenerate areas that we have developed. OVERVIEW CORPORATE GOVERNANCE 60 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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SUSTAINABILITY REPORT
ONE STEP FURTHER – OUR PLANS FOR THE FUTURE
At Land & General, we are always seeking ways to grow and improve our sustainability reporting. For our next reporting year, we are focusing on closing the gaps required to achieve a FTSE4Good Bursa Malaysia listing. The FTSE4Good index has been designed to identify those Malaysian companies with leading corporate responsibility practices. The index takes into account environmental, social, and governance (“ESG”) factors when assessing if a business meets the listing criteria.
Furthermore, we are developing a three-year roadmap to align our existing KPIs with more medium and long-term goals and targets. This will provide additional focus and direction to our sustainability reporting, and allow us to showcase our achievements in a consistent and measurable way.
CONCLUSION
This year at Land & General, our response to the COVID-19 pandemic demonstrated our resilience in the face of challenges. Despite business interruptions and adjustments to the “new normal”, we continued to make meaningful progress on our sustainability journey. We are particularly grateful for the strength and resilience of our employees to work as a team to deliver “Value for Tomorrow”. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 61 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) CORPORATE GOVERNANCE OVERVIEW STATEMENT
The Board of Directors (“the Board”) of Land & General Berhad (“the Company”) is fully committed to the principles of the Malaysian Code on Corporate Governance 2017 (“MCCG”).
The Board constantly strives to ensure that good corporate practices are carried out throughout the Group as fundamental in fulfilling its responsibilities, which include protecting and enhancing shareholder value as well as the financial performance of the Company.
The Board is pleased to present this Corporate Governance Overview Statement to provide an overview of the application of the 3 Principles as set out in the MCCG.
The Corporate Governance Report which sets out the application of each Practice in the MCCG is available for viewing on the Company’s corporate website at www.land-general.com.
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS
I. BOARD RESPONSIBILITIES
Board Charter The Board had formalised a Board Charter, which the primary objective of the Board Charter is to set out the roles and responsibilities of the Board, the division of authority and responsibilities of the Board and Management, terms of reference and composition of Board Committees, and other administrative policies and procedures in relation to the operation of the Board as a whole.
The Board Charter has been reviewed to ensure it remains consistent with the Board’s objective and responsibilities, and all the relevant standards of corporate governance.
The Board Charter can be found from the Company’s website at www.land-general.com.
Roles and Responsibilities The roles of the Chairman and the Managing Director are clearly defined, with each carrying out his duties and responsibilities within the Company. The Chairman heads the Board and is responsible for ensuring the effectiveness of the Board. The Managing Director has overall executive responsibilities for the day-to-day business operations and the implementation of the Board’s decisions.
The details of the roles and responsibilities of the Chairman and Managing Director are clearly stated in the Board Charter of the Company.
The Board has established written policy determining which issues would require Board decision and which issues are delegated to the Board Committee or Management, subject to variation from time to time as determined unanimously by the Board. OVERVIEW CORPORATE GOVERNANCE 62 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The Board reserves full decision making powers on the matters relating to-
a) conflict of interests relating to major shareholders or a Director or persons connected to Director; b) whether convening of a general meeting to approve a transaction or contract is required; c) material acquisition and disposal of Company assets not in the ordinary course of business which may require the shareholders’ approval; d) investments of capital levels; e) authority level, in particular cheque signatories; f) cash investment policies; and g) key human resource issue e.g. renewal of contract of service and remuneration of executive Directors.
Overseeing the Conduct of Businesses of the L&G Group The Board has delegated the Group’s executive responsibilities for day to day business operations to the Managing Director. Management personnel are in turn delegated with specific functions as assigned by the Managing Director. Plans and operating procedures are in place for each function to ensure continuity and smooth business operations of the L&G Group.
Strategic planning is an ongoing process in L&G and during the financial year under review, the Board had reviewed the business performance of the Group quarterly in the Managing Director’s Report. Performance of the Group in each business unit was reviewed and variance analysis was conducted for each quarter and reported by the Managing Director at the Board meetings.
Management had conducted review and revision of the budget for the current financial year before end of 3rd financial quarter and had drawn up budgets and plans for the next financial years. The revised budget and the budget for the next financial years had been tabled to the Board for deliberation and approval in the 4th financial quarter, before commencement of the new financial year.
Board Committees To assist the Board in the discharge of its duties effectively, the Board has delegated certain functions to the following Board Committees as follows-
a) Audit Committee; b) Nominating Committee; c) Remuneration Committee; and d) Risk Management Committee.
The Risk Management Committee was formed by the Board on 25 November 2019 to enhance the effectiveness of managing the risks of the Group.
Each operating within clearly defined terms of reference and the details of which could be found in the appendices to the Board Charter, a copy of which is posted at the Company’s website.
The Board noted the decisions, recommendations and issues deliberated by the Board Committees through the minutes of these Board Committees. Matters which require consideration and deliberation by the Board are escalated by the Board Committees to the Board. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 63 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The composition and key functions of the Board Committees are summarised as follows-
a) Audit Committee The Audit Committee, comprising wholly non-executive Directors with a majority being Independent Directors, is responsible for reviewing and monitoring the work of the Group’s internal audit function as well as ensuring that an objective professional relationship is maintained with the external auditors.
b) Nominating Committee The Nominating Committee consists exclusively of Independent Directors.
The key functions of the Nominating Committee include assessing and recommending candidates for the appointment of new directors to the Board, and carrying out annual assessment on the effectiveness of the Board as a whole, the effectiveness of the Board Committees, and contribution of each individual Director and thereafter, recommend its findings to the Board, where applicable.
c) Remuneration Committee The Remuneration Committee, which comprises entirely Non-Executive Directors, is authorised to review, assess and recommend to the Board the remuneration of Directors.
d) Risk Management Committee The Risk Management Committee consists of majority of Independent Non-Executive Directors and the Managing Director, is primarily responsible to assist the Board in the effective discharge of its responsibilities of reviewing the process in identifying, managing, evaluating and monitoring principal risks as well as overseeing the implementation of appropriate systems and risk assessment process to manage such risks of the Group.
Support Services In furtherance of their duties, the Board is supported by a qualified Company Secretary in carrying out its roles and responsibilities. The Board also have access to the advice of both external and internal auditors of the Company and other independent professional advisers, at the Company’s expense.
The Company Secretary provides support services to the Board and Board Committees. The Company Secretary attends all Board meetings as well as Board Committee meetings and ensures that accurate and proper records of the proceedings of such meetings are kept. Further, the Company Secretary also provides advice and updates on regulatory requirements to the Board and Board Committee as well as carrying out tasks as assigned by the Board and Board Committees.
Board Meetings Dates for Board meetings are scheduled in advance before the end of the previous financial year to enable Directors to plan ahead and fit the year’s meetings into their own schedules.
Board meetings are held every quarter and additional meetings are convened as and when necessary. Additional Board meetings are held when there are important corporate exercises or issues that require urgent consideration or decision of the Board.
During the financial year ended 31 March 2021, a total of eight (8) Board meetings were held. OVERVIEW CORPORATE GOVERNANCE 64 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The attendance of the Board meetings held during the financial year ended 31 March 2021 is as follows -
Directors No. of Meetings attended/held Dato’ Hj Zainal Abidin Putih 8/8 Low Gay Teck 8/8 Ferdaus Mahmood 8/8 Dato’ Ir Dr A Bakar Jaafar 8/8 Dato’ Hj Ikhwan Salim Dato’ Hj Sujak 8/8 YM Tengku Maruan Tengku Ariff 8/8 Hoong Cheong Thard 7/8 Chiu Andrew Wah Wai 8/8 Dato’ Noorizah Hj Abd Hamid 8/8
To ensure effective conduct of Board meetings, a structured formal agenda and Board meeting papers relating to the agenda had been circulated to all Directors prior to each Board meeting. Board meeting papers included progress reports on operations, quarterly results of the Group and the Company, financial information and minutes of the Board and Board Committees. The Directors were thus given sufficient time to peruse the matters that were tabled at the Board meetings to enable effective participation and deliberation of the matters, and ensuring informed decision making.
To provide clarification on matters tabled for the Board’s consideration, Management personnel was invited to attend Board meetings to furnish additional details.
Directors’ Training Directors’ Training is important to enable the Directors to equip themselves with the knowledge to discharge their duties more effectively.
During the financial year under review, the Directors had attend relevant training programmes conducted by external experts. In addition to this, internal management had from time to time provided updates regarding the latest updates pertaining to the Listing Requirements of Bursa Securities, statutory provisions, new regulations and accounting standards imposed by the relevant authorities.
Annually, In-house Directors’ Training is organised after the training need of the Directors is reviewed by the Board.
During the financial year under review, an In-house Directors’ training, entitled “From Integrated Reporting to Integrated Thinking” was organised with the assistance of Malaysian Institute of Corporate Governance (MICG).
In addition to the In-house Directors’ Training, the Nominating Committee also encouraged Directors to attend any other appropriate trainings to keep the Directors abreast of the current developments in the marketplace. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 65 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
Briefings, seminars, conferences, workshops, and others attended by the Directors of L&G during the financial year are summarised as stated below.
Dato’ Hj Zainal Abidin Putih • Update on Digital Landscape and E-commerce 24 August 2020 • Briefing on MACC Section 17A – Corporate Liability Provision 24 August 2020 • Board briefing on Adequate Procedures Principles T.R.U.S.T – Pursuant to subsection 5 1 December 2020 of Section 17A under the MACC Act 2009 • Cyber Security Awareness Training 1 December 2020 • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021 • FIDE Forum – Rethinking Our Approach to Cyber Defence in FIs 11 March 2021 • Khazanah Nasional Bhd (KNB) – Asset Liability Management Workshop (ALM) for ARC 26 March 2021 members
Low Gay Teck • Revitalising the Real Estate Market to Boost Home Ownership 3 September 2020 • Captains’ Forum: Transformation towards recovery – Financial Resilience 25 September 2020 • Housing Conference 2020 – Beyond the Pandemic – Reshaping Real Estate 26-27 November 2020 • Budget 2021 – Key Proposals in relation to Malaysia Property Industry 2 December 2020 • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
Ferdaus Mahmood • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
Dato’ Ir Dr A Bakar Jaafar • “OTEC-H2 for Sustainability”. UTM RFTI Lecture Series #4-2020 15 May 2020 • “Conversion of Excess Pressure in Water Supply Distribution (WSD) Networks into Power 28 July 2020 & Hydrogen Fuel”. MIWC-MWA Webinar 12 • UTM Faculty of Engineering Distinguished Lecture Series #32 by Prof Dr Yasuyuki 6 August 2020 Ikegami, Director, Institute of Ocean Energy Saga University, Imari, Kyushu, Japan • “OTEC-generated Hydrogen for CO2 Conversion into Green Hydrocarbons.” UKM Faculty 4 March 2021 of Science of Technology. Seminar Berkala Jabatan Sains Bumi & Alam Sekitar, No. 1/2021 • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021 OVERVIEW CORPORATE GOVERNANCE 66 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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Dato’ Hj Ikhwan Salim Dato’ Hj Sujak • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
YM Tengku Maruan Tengku Ariff • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
Hoong Cheong Thard • HSBC 4th Annual Asia Credit Conference 19 June 2020 • HSBC Asian Financial Forum 2021 18 – 19 January 2021 • UBS Wealth Insights 2021 20 January 2021 • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
Chiu Andrew Wah Wai • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
Dato’ Noorizah Hj Abd Hamid • Risk Management and Risk Governance in the New Normal – Consideration for Board 10 September 2020 • Leadership Energy Summit Asia 2020 (LESA 2020) 16 – 19 November 2020 • IERP - Global Conference 2020 Enterprise Risk Management: When Irrationality Meets 17 – 18 November 2020 Disruption • PNB Knowledge Sharing Initiatives Forum 2020 – Malaysia and Asean: Navigating China 26 November 2020 – US relations in the 21st Century PNB • L&G In house Directors’ Training – Integrated Reporting to Integrated Thinking 8 March 2021
Sustainability In the course of pursuing the vision and mission of the Group, the Board acknowledges that practices which support corporate responsibility are keys to the sustainability of the Group. The Board believes no company can prevail by maximising the shareholder’s value alone, the needs and interests of other stakeholders must be taken into consideration.
More information is provided in the Sustainability Report on page 21 to 60 of this Annual Report.
Code of Conduct The Company had adopted a Code of Conduct for Directors relating to ethical practices. A separate set of Code of Ethical Practices relating to Group’s business operations was formulated for staff and employees. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 67 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
Code of Conduct for Directors stresses on the following key values where all Directors of the Group are to:
• act honestly, fairly and professionally in all business dealings; • foster a culture of integrity; • work together to promote a safe, ethical and professional workplace; • comply with the laws, rules and regulations under which the Company conducts its business; and • respect the local communities wherever the Company operates.
The Code of Conduct for Directors can be found from the Board Charter published at the Company’s website at www. land-general.com.
Whistle-blowing policy The Board had formalised a whistle-blowing policy as the Board is committed to the highest standard of integrity, openness and accountability in the conduct of its businesses and operations. It aspires to conduct its affairs in an ethical, responsible and transparent manner. In recognising these values, L&G provides avenues for all employees, and members of the public to disclose any improper conduct within the L&G group of companies.
Any concerns relating to misconduct, questionable issues or improper actions should be emailed to whistleblower@ land-general.com by providing the following information-
• nature of misconduct, questionable issues or improper actions; • name of person/persons involved; • date, time and location; • the details of events taken place; • other witness, if any; and • documentation or evidence available.
Alternatively, such concerns which shall be classified as “Strictly Private and Confidential” may be directed in writing to the Senior Independent Director which the contact details are set out on page 74 of this Annual Report.
II. BOARD COMPOSITION
Composition of the Board of Directors The Board’s composition is well balanced with five (5) Independent Non-Executive Directors, three (3) Non-Independent Non-Executive Directors and one (1) Managing Director.
The Company is led and controlled by an experienced Board made up of professionals and entrepreneurs who have a diverse range of business, financial and technical skills and experience.
During the financial year under review, Encik Ferdaus Mahmood continued to undertake the advisory role to Management on operational matters of the Group following his retirement as Executive Director since 31 December 2015. OVERVIEW CORPORATE GOVERNANCE 68 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
Boardroom Diversity The Board supports gender diversity as part of the agenda in achieving boardroom diversity as the Board acknowledges and embraces that a wide range of perspectives is critical to effective corporate governance and strategic decision making in the fast changing business environment.
Diverse skill and experience are essential for the successful attainment of the corporate plans and objectives of the Group.
A brief profile of each Director is set out on pages 3 to 8 in the Director’s Profile of this Annual Report.
Independent Directors The Independent Non-Executive Directors are independent of management and are free from any business or other relationship with the Company which could interfere with the exercise of their independent judgment. These will ensure unbiased and independent view in the decision-making process.
To reinforce independence, the Independent Directors do not receive performance based remuneration or share based incentives from L&G.
Board Evaluation Processes Periodical board evaluation processes would facilitate improvement on the effectiveness of the Board and individual Directors.
Pursuant to Paragraph 15.08A of Main Market Listing Requirements (“MMLR”), the activities of the Nominating Committee in respect of the financial year ended 31 March 2021 are disclosed as stated below.
Nominating Committee had one (1) meeting during the financial year under review and all members of the Nominating Committee attended the said meeting.
a) Assessment on Independent Directors In respect of the financial year ended 31 March 2021, the Nominating Committee had reviewed and assessed the performance and independence of all the Independent Directors, including Dato’ Hj Zainal Abidin Putih, Dato’ Ir Dr A Bakar Jaafar, Dato’ Hj Ikhwan Salim Dato’ Hj Sujak and Tengku Maruan Tengku Ariff who have served as Independent Directors for a cumulative term of more than 9 years, based on the criteria as set out in Paragraph 1.01 of the MMLR.
In addition to the independence criteria stated under the MMLR, the Independent Directors were also assessed on the following aspects-
• whether the Independent Directors have the ability to exert considerable influence on the L&G Group’s financial transactions; and • whether there is any significant links with other directors through involvement in other companies or body corporates which would materially hamper the independent judgement or ability to act in the best interest of the L&G Group.
The Board had considered and was satisfied with the assessments carried out by the Nominating Committee. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 69 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
The Board shall seek shareholder’s approval to enable Dato’ Hj Zainal Abidin Putih, Dato’ Ir Dr A Bakar Jaafar, Dato’ Hj Ikhwan Salim Dato’ Hj Sujak and Tengku Maruan Tengku Ariff to continue to serve as an Independent Directors/ Chairman at the 58th Annual General Meeting (“AGM”) based on the justifications as set out below.
(i) Fulfilment of the criteria of Independent Directors pursuant to the MMLR.
(ii) Possession of high academic qualifications.
(iii) Enhancement of the Board’s diversity in terms of experience, skill and expertise.
(iv) Familiarity with the Company’s business operations and the property development market given the length of service of more than 9 years in the Company and the awareness of current issues confronting the Company in which valuable input were provided over the years to steer the Company forward.
(v) Devotion of sufficient time commitment and attention to their professional obligations for informed and balanced decision making in which they were not over-committed in other directorships, their personal affairs or businesses.
b) Directors’ Annual Assessments The Nominating Committee undertakes an annual review of the performance of each Director through a self- assessment exercise and upon completion of the review and assessment, the Nominating Committee submits its comments and recommendations to the Board for consideration.
The Director’s self-assessment in respect of financial year ended 31 March 2021 covered the following aspects-
(i) fit and proper of a director; (ii) contribution and performance of a director; (iii) caliber and personality of a director; (iv) meeting attendance of Board and Board Committees; and (v) training, seminar, conference, etc, attended by director.
All Directors had carried out the Directors’ self-assessment exercise in respect of the financial year ended 31 March 2021 and the Nominating Committee had submitted its comments to the Board for consideration.
The Nominating Committee had also taken into the consideration the outcome of the Directors’ self-assessment before making recommendations to the Board for Directors who would be seeking re-election and re-appointment at the AGM.
c) Board Assessment and Board Committee’s Assessments Annually, the Nominating Committee undertakes Board assessment and Board Committee’s assessments.
The Nominating Committee had conducted Board assessment in respect of the financial year ended 31 March 2021. OVERVIEW CORPORATE GOVERNANCE 70 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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The Board assessment covered the following aspects-
(i) Board structure; (ii) Board operations; (iii) Board roles and responsibilities; and (iv) Board Chairman’s roles and responsibilities.
The Nominating Committee had also reviewed the Board Committee’s assessments consisted of questionnaires which had been completed by the Chairman of the respective Board Committee as follows -
(i) Audit Committee; (ii) Nominating Committee; (iii) Remuneration Committee; and (iv) Risk Management Committee.
The said assessments had covered the following aspects -
(i) composition of the respective Board Committee; (ii) effectiveness of the respective Board Committee’s roles; (iii) consideration on appointment of Chairman of the respective Board Committee; and (iv) documentation of the minutes of the respective Board Committee.
The Nominating Committee had reported the above-mentioned assessments to the Board.
d) Assessment on the members of the Audit Committee Pursuant to the Paragraph 15.20 of the MMLR, the Nominating Committee of a listed issuer must review the term of office and performance of an Audit Committee and each of its members annually to determine whether such Audit Committee and Members have carried out their duties in accordance with their terms of reference.
The Nominating Committee had reviewed and assessed the performance of each of the members of the Audit Committee in respect of the financial year ended 31 March 2021 through a self-assessment exercise. The said assessment had covered the following aspects-
(i) corporate governance, risk management and internal controls; (ii) audit and financial reporting; and (iii) skill set.
Upon completion of its review and evaluation, the Nominating Committee’s comments and recommendations were submitted to the Board. The Nominating Committee agreed and was satisfied with the performance of the Audit Committee and each of its members. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 71 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
III. REMUNERATION
The Company aims to set remuneration levels which are sufficient to attract and retain the Directors and Senior Management needed to run the Company successfully, taking into consideration the function, workload and responsibilities.
The Board was assisted by the Remuneration Committee to review and recommend on the remuneration of Managing Director pursuant to the contract of service. The Managing Directors’ remuneration comprises basic salary and other customary benefits made available by the Group. The Board had approved the Managing Director’s remuneration after taking into account the market rates and the performance of the Managing Director and the Group.
The Non-Executive Directors’ remuneration comprises fees and meeting allowances that are linked to their expected roles and level of responsibilities. The Directors’ annual fees, which are determined by the Board as a whole, are approved by shareholders of the Company at each AGM. The meeting allowances of the Non-Executive Directors are also approved by the shareholders of the Company at the relevant AGM.
The former Executive Director, Encik Ferdaus Mahmood who retired on 31 December 2015 and had been redesignated as Non-Independent Non-Executive Director since 1 January 2016. A (fixed) advisory fee based on a contract of service was formalised between the Company and the former Executive Director for his advisory role in relation to operational matters of the Group. For the financial year ended 31 March 2021, the total advisory fees paid was RM126,000. This advisory fee is not subject to shareholders’ approval.
As for the Senior Management personnel, the salaries and benefits were agreed upon before engagements were formalised. The salaries and benefits take into consideration the complexities of the works, qualification, experience and other factors. As senior management personnel work closely with the Managing Director, their salaries and bonuses were reviewed and decided by the Managing Director after the annual performance appraisal exercise of the Group.
The Remuneration Committee had one (1) meeting during the financial year under review. All members of the Remuneration Committee had attended the said meeting.
At the coming 58th AGM, the Board shall seek shareholders’ approval for Directors’ fees and meeting allowances.
Pursuant to Paragraph 9.25 and paragraph 11 of Appendix 9C of the MMLR, the details of the Directors’ remuneration of the Company and the Group on the named basis for the financial year ended 31 March 2021 are tabulated as follows:
A) Managing Director
Defined Contribution Benefits Plan Salaries Bonus in kind Total No. Name (RM) (RM) (RM) (RM) (RM) 1. Low Gay Teck 121,352 866,796 144,466 33,680 1,166,294 OVERVIEW CORPORATE GOVERNANCE 72 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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B) Non-Executive Directors
Total Fees for Meeting Fees And Directors’ AC(1) NC(2) RC(3) RMC(4) signing Total Allowance Meeting Name of Fees Fees Fees Fees Fees DCR(5) Fees (Paid)(6) Allowance No. Director (RM) (RM) (RM) (RM) (RM) (RM) (RM) (RM) (RM) 1. Dato’ Hj Zainal 120,000 - - - - 10,500 130,500 9,000 139,500 Abidin Putih 2. Dato’ Ir Dr A 30,000 10,000 5,000 10,000 5,000 10,500 70,500 20,000 90,500 Bakar Jaafar 3. Dato’ Hj Ikhwan 30,000 20,000 - - - 10,500 60,500 14,000 74,500 Bin Dato’ Hj Sujak 4. Tengku Maruan 30,000 - 5,000 - 5,000 10,500 50,500 13,000 63,500 Tengku Ariff 5. Hoong Cheong 30,000 10,000 - 5,000 - 10,500 55,500 13,000 68,500 Thard 6. Chiu Andrew 30,000 - - 5,000 - 10,500 45,500 8,000 53,500 Wah Wai 7. Ferdaus 30,000 - - - - 10,500 40,500 8,000 48,500 Mahmood 8 Dato’ Noorizah 30,000 - - - 10,000 10,500 50,500 12,000 62,500 Hj Abd Hamid TOTAL 330,000 40,000 10,000 20,000 20,000 84,000 504,000 97,000 601,000
The total fees amounting to RM504,000 is subject to shareholders’ approval at the 58th AGM.
There is no Directors’ remuneration for subsidiaries of the Group.
Notes: (1) Audit Committee (2) Nominating Committee (3) Remuneration Committee (4) Risk Management Committee (5) Basis used for the computation of additional fees to be paid to Non-Executive Directors is based on the number of Directors’ Circular Resolution signed during the financial year ended 31 March 2021 (6) Mandate from shareholders obtained from the previous 57th AGM for payment of meeting allowance for Board and Board Committees’ meetings held during the financial year under review. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 73 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT
Financial Reporting The Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Group, and for ensuring that the financial statements comply with the Companies Act, 2016 and applicable approved Accounting Standards in Malaysia.
The Board is assisted by the Audit Committee in fulfilling the statutory and fiduciary responsibilities in the assessment and evaluation of the Group’s management and financial reports of the performance of business, accounting policies, risk and internal controls.
The Audit Committee serves as an independent party in the review of the financial information presented by Management before distribution to all shareholders and stakeholders. It ensures that the financial statements comply with applicable accounting standards and also provide direction over the internal audit function and relationship with the external auditors to ensure independence from Management.
Further details are contained in the Audit Committee’s Report in the next section of this Annual Report.
Internal Control and Risk Management The Board acknowledges their responsibility to maintain a sound system of internal controls covering not only financial controls but also operational and compliance as well as risk management. This system is designed to manage, rather than eliminate, the risk of failure to achieve the Group’s corporate objectives, as well as to safeguard shareholders’ investments and the Group’s assets. The Board seeks regular assurance on the continuity and effectiveness of the internal control system through independent review by the internal and external auditors.
To enhance the risk management function, the Board had, on 25 November 2019, formed a board level Risk Management Committee. The terms of reference of the Risk Management Committee is available at the Company’s website at www.land- general.com.
The details of the Enterprise Risk Management (“ERM”) framework are disclosed in the Statement on Risk Management and Internal Control in the following section of this Annual Report.
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
Corporate Disclosure To ensure timely and high quality disclosure, Company Disclosure Policies and Procedures are in place where policies, authority chart, procedures and processes are clearly defined.
The Board recognises the importance of timely dissemination of information to shareholders and investors to ensure that they are well informed of all major developments of the Company and the Group. Such information is communicated to shareholders and investors through various disclosures and announcements to the Bursa Securities, including the quarterly financial results, annual reports and where appropriate, circulars and press releases.
In compliance with the Listing Requirements of Bursa Securities, all announcements made by the Company to Bursa Malaysia such as the Group’s quarterly financial results, annual reports and other mandatory announcements are made available at the Company’s website: www.land-general.com.
The website also contains current corporate and non-financial information to provide general information and the on-going business activities of the Group. OVERVIEW CORPORATE GOVERNANCE 74 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
Relationship with Shareholders and Investors General meeting represents the principal forum for dialogue and interaction with shareholders. The Board encourages and welcomes participation from shareholders to ask questions regarding the resolutions being proposed at the meeting and also any other matters pertaining to the business activities of the Group. The Directors, Senior Management personnel, the external auditors and advisers are present during these meetings to respond to questions raised by shareholders.
At the 57th AGM, the Managing Director and Chief Financial Officer of the Company gave a slide presentation to the shareholders on the Group’s operating and financial performance for the financial year under review which included up-to- date operational activities of the Group and following that, a question and answer session with the shareholders was held via remote participation online platform. As good corporate governance practice, the summary of discussion of the 57th AGM is published at the Company’s website for public viewing.
At the 57th AGM held on 23 September 2020, poll vote was conducted.
To further promote effective communication and proactive engagement, any concerns or queries regarding the Group can be directed to YBhg Dato’ Ir Dr A Bakar Jaafar who is the Senior Independent Non-Executive Director of the Company.
Address: YBhg Dato’ Ir Dr A Bakar Jaafar c/o Land & General Berhad 8trium, Level 21 Menara 1, Jalan Cempaka SD 12/5 Bandar Sri Damansara 52200 Kuala Lumpur
Email: [email protected]
In addition, to enable the public to forward queries to the Company, the aforesaid Company’s website contains the names, contact email addresses and telephone numbers of the following personnel:
Mr Tan Boon Siong Chief Financial Officer Telephone No: 603-6279 8030 Fax No: 603-6275 1715 Email: [email protected]
Ms Lee Siw Yeng Secretary Telephone No. 603-6279 8183 Fax No: 603-6277 7061 Email: [email protected]
CONCLUSION
Moving forward, the key focus areas and future priorities of the Board shall include continuous enhancement of the corporate disclosures as required by the relevant regulations, and improvement of the Group’s corporate governance practices and procedures, particularly on risk management and internal control. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 75 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Directors are required by company law to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results of the Group and of the Company of the financial year then ended.
In preparing the financial statements for the year ended 31 March 2021, the Directors have:
• adopted suitable accounting policies and then applied them consistently; • made judgements and estimates that are prudent and reasonable; • ensured applicable accounting standards have been followed, subject to any material departure and explained in the financial statements; and • prepared the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the Companies Act, 2016. The Directors are also responsible for safeguarding the assets of the Group and of the Company and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Board Statement on Suitability and Independence of External Auditors
To uphold the integrity of financial reporting, the Board takes the stand that the external auditors must be objective, independent and competent in performing their audit in relation to the financial statements of the Group and the Company so as to ensure the audited financial statements give a true and fair view of the financial position of the Group and the Company. OVERVIEW CORPORATE GOVERNANCE 76 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) ADDITIONAL COMPLIANCE INFORMATION
AUDIT AND NON-AUDIT FEES
The amount of audit fees paid or payable to the external auditor incurred by the Company and the Group for the financial year ended 31 March 2021 has been reflected under Note 22 to the Audited Financial Statements, on Page 149 of this Annual Report.
The amount of non-audit fees paid or payable to the external auditor incurred by the Company and the Group for the financial year ended 31 March 2021 has been reflected under Note 22 to the Audited Financial Statements, on Page 149 of this Annual Report.
MATERIAL CONTRACTS
There were no material contracts subsisting at the end of the financial year entered into since the end of the previous financial year by the Company and its subsidiaries involving the interests of the Directors or major shareholders. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 77 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) AUDIT COMMITTEE REPORT
The Audit Committee (“AC”) was established on 8 August 1991 to act as a Committee of the Board to fulfill its fiduciary responsibilities relating primarily to business ethics, policies and practices, and financial management and controls.
MEMBERS AND MEETINGS
The AC comprises three (3) members, two (2) of whom are Independent Non-Executive Directors and another one (1) is Non- Independent Non-Executive Director.
The AC held 6 meetings during the financial year ended 31 March 2021. The members of the AC and the record of their attendance are as follows:
Attendance/ Number of Audit Committee Position on the Board meetings held 1. Dato’ Hj Ikhwan Salim Dato’ Hj Sujak Chairman of Audit Committee, 6/6 Independent Non-Executive Director 2. Dato’ Ir Dr A Bakar Jaafar Senior Independent Non-Executive Director 6/6 3. Mr Hoong Cheong Thard Non-Independent Non-Executive Director 5/6
There was no private meeting held during the financial year ended 31 March 2021.
In compliance with the Listing Requirements of Bursa Malaysia Securities Berhad, the terms of reference of the AC is made available at the Company’s website: www.land-general.com.
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
For the financial year ended 31 March 2021, the main activities undertaken by the AC were as follows:-
A) Financial Reporting
1. Reviewed the draft quarterly unaudited financial results of the Company and the Group and made the necessary recommendations to the Board for approval for announcement to Bursa Malaysia Securities Berhad;
2. Reviewed the Audit Planning Memorandum before the commencement of audit. The external auditors’ engagement partner was invited to present to the AC in relation to the audited financial statements for the financial year ended 31 March 2021 (“AFS”). The following matters were highlighted and discussed as listed below.
a) Auditor’s scope of services and audit fees; b) Auditor’s independence in relation to the performance of audit in accordance with MIA By-laws; c) Responsibilities of external auditors and directors in relation to the AFS; d) Concept of materiality in relation to the performance of audit; e) On-going review of key audit matters; f) Audit focus areas; g) Audit methodology and timing of audit; h) Audit Transformation; i) Fraud considerations; j) Reported observations in prior year’s audit; and k) False or misleading financial statements. OVERVIEW CORPORATE GOVERNANCE 78 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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AUDIT COMMITTEE REPORT
3. The external auditors had reported its audit findings to the AC on the outcome of their audit in relation to the financial positions of the Company and the Group. At the AC Meeting, the AC had considered and discussed the areas of audit focus as reported by external auditors;
The AC and external auditors discussed and considered the areas of audit focus and the outcome of the audit of the Group, summarised as follows:-
a) Revenue recognition; b) Impairment assessment of investment in subsidiaries and amount due from subsidiaries; c) Net realisable value assessment of land held for property development and inventories; d) Provision for financial obligation; e) Provision for costs to complete; f) On-going tax audit pertaining to a compulsory sale of land in Sri Damansara Sdn Bhd; g) Accounting treatment for new joint arrangement of Pacific Parkland Sdn Bhd; h) Contingent consideration; and i) Fair value of investment under voluntary suspension – Company.
4. Reviewed on the assistance given by the Group’s employees to the external auditors;
5. Reviewed the audited financial statements of the Company and the Group prior to the submission to the Board for their consideration and approval (to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act, 2016 and the applicable Financial Reporting Standards in Malaysia); and
6. Reviewed and deliberated the assessment on external auditors’ performance and independence pursuant to Guidance for Practice 8.3 of Malaysian Code on Corporate Governance 2017 (“MCCG 2017”). The aspects reviewed and deliberated by the AC are summarised as follows:-
a) independence and objectivity; b) audit scope and planning; c) audit communication; d) quality processes/performance; and e) audit fees.
B) Internal Audit
1. Reviewed, discussed and agreed the internal audit plan, scope, timeline and professional fees before commencement of internal audits. The AC also considered experience and background of the principal of the internal audit firm;
2. Reviewed and discussed the internal audit findings and internal audit follow-ups on the key divisions of the Group at the AC meetings. Issues highlighted and discussed include internal control issues and implementation of recommended control measures to be undertaken by the relevant divisions;
3. Reviewed the updated risk profile of the Group and the adequacy and integrity of the internal control systems to manage these risks; and
4. Reviewed and deliberated the internal audit function evaluation pursuant to Guidance for Practice 10.1 of MCCG 2017.
C) Others
1. Reviewed the Statement on Risk Management and Internal Control and the AC Report for Board’s consideration and approval for inclusion in the annual report. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 79 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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AUDIT COMMITTEE REPORT
INTERNAL AUDIT FUNCTION
The internal audit function of the Group is currently carried out by BDO Governance Advisory Sdn Bhd (“BDO”), an independent professional services provider whose principal responsibility is to undertake regular and systematic reviews of the system of internal controls, so as to provide reasonable assurance that such systems continue to operate effectively and efficiently. The internal audit function is to assist the Board and the AC to evaluate the system of internal control and to provide their recommendation to the Board and the Management for further improvement.
The internal auditors had carried out audits according to the internal audit plan. The internal audit function of the Group adopts a risk-based approach steered by internal policies and procedures and is in-line with the Institute of Internal Auditors’ (IIA) International Professional Practices Framework (IPPF). The following activities were carried out during the financial year:-
Subsidiaries / Division Business Process Reviewed School Division – Enrolment and Fees · Student enrolment process; - Sri Bestari International School · Billing, collection and credit control; and - Sri Bestari Private School · Budgetary control on revenue. Booking Fees to Sales Confirmation Collection · The booking fees collection and banking-in; - Sales & Marketing Department · Discount, rebates and promotional packages; · Collection of down-payment (if any) and differential sums; · Refund of booking fees and earnest deposit; and · Credit Control such as follow-up actions on outstanding collections. Fixed Assets Management · Capital budget setting and monitoring process; - Headquarters and Sales Galleries · Maintenance of fixed asset registers; - Sri Bestari International School · Acquisitions, disposals and write offs of fixed assets; · Control on transfer/movement of fixed assets; · Security measures over storage of fixed assets; and · Maintenance of equipment and service records (if any). Handover Procedures and Defects Management · Vacant possession handover procedures in accordance to Company’s - Astoria Ampang project policies and procedures; - Sena Parc project · Treatment of rebates and other promotion packages during vacant possession stage e.g. refund procedures; · Follow-up actions on outstanding balance sum and miscellaneous charges; and · Defects management e.g. timeliness of defects inspection and defects rectification procedures.
During the financial year, the costs incurred for the internal audit function was RM93,729.09.
DATO’ HJ IKHWAN SALIM DATO’ HJ SUJAK Chairman of Audit Committee Independent Non-Executive Director
12 July 2021 OVERVIEW CORPORATE GOVERNANCE 80 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTRODUCTION
The MCCG 2017 requires listed companies to maintain a sound system of risk management and internal controls to safeguard shareholders’ investments and the Group’s assets. Pursuant to paragraph 15.26(b) of the Listing Requirements of Bursa Securities, the Board of Directors is required to include a statement in the Annual Report on the state of the Group’s risk management and internal controls for financial year under review.
BOARD’S RESPONSIBILITY
The Board recognises the importance of a sound system of risk management and internal control to safeguard shareholders’ investment and the Group’s businesses and assets. The Board acknowledges its primary responsibility to ensure that risks in the Group are identified, measured and managed with appropriate system of risk management and internal controls, and to ensure that the effectiveness, adequacy and integrity of the risk management and internal control systems are reviewed on an on-going basis.
The review covers, inter alia, financial, operational and compliance system controls and risk management procedures of the Group. However, such procedures are designed to manage rather than to eliminate risks that may impede the achievement of the Group’s business objectives. Accordingly, the system can only provide reasonable and not absolute assurance against material errors, misstatement, losses or fraud.
The Group has in place an on-going process for identifying, evaluating and managing significant risks that may affect the achievement of business objectives for the year and up to the date of this report. The significant risks are reported to the Board on regular basis for their deliberation.
The Risk Management Committee (“RMC”) was established to assist the Board in the discharge of its primary responsibilities of reviewing the process in identifying, managing, evaluating and monitoring the significant risks as well as overseeing the implementation of appropriate systems and risk assessment processes to manage such risks within the Group.
The RMC has evaluated and monitored the significant risks relevant to the Group and appraised and assessed the efficacy of controls implemented to mitigate those risks through a formalised monitoring and reporting process. Reviews are conducted by the RMC on regular basis.
The Board had considered the matters reported by the Audit Committee (“AC”) pursuant to the terms of reference of the Audit Committee as well as matters reported by the RMC on quarterly basis and additional meetings are convered as and when necessary.
ENTERPRISE RISK MANAGEMENT (ERM)
The Board has formalised a comprehensive Enterprise Risk Management (“ERM”) Framework and clear governance structure that takes into account all significant aspects of internal control including risks assessment, the control environment and control activities, information and communication and monitoring. Key business risks have been categorised to highlight the source of the risk, and scored to reflect both financial and reputational impact of the risk and the likelihood of its occurrence. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 81 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The Board, AC, RMC, Senior Management and Heads of Department / Operating Unit of the Group play an important role in ensuring the effective management of risks.
The risk management governance structure sets out the structure used to assign responsibility for managing risks and is based on the following key principles:-
1. Head of Department (or Operating Unit) (“HOD”) a) The responsibility of risk identification and management of each operating unit lies with the respective HOD. Any significant risks identified with the corresponding risk management activities are communicated to Senior Management before the results are being communicated to the Board; b) Involvement in identification, assessment, mitigation, monitoring and reporting of risks that are appropriate to the needs of the organisation; and c) Implement and manage various controls identified.
2. Senior Management a) Provide further input on identification, assessment, mitigation, monitoring and reporting of risks; b) Moderate risk scoring based on group level risk tolerance; and c) Consider and recommend changes of risk profile to RMC by looking into the significance and impact of the risk on the overall Group operation.
3. RMC a) Oversee the implementation and effectiveness of the ERM Framework; b) Review and monitor L&G Group’s risk profile and risk dashboard on a periodic basis to understand the critical risks facing by the Group and how the risks are being mitigated; c) Oversee Management in the design, implementation and monitoring of the risk management and internal control systems that includes identifying material weaknesses and recommending areas for improvement and additional risk mitigations; d) Communicate to the Board on the changes to the key risk profiles and the course of action to be taken by Senior Management and/or HOD in mitigating these risks on periodic basis; e) Oversee the sustainability reporting of the Group that includes among others, reviewing the key performance indicators and sustainability matters; and f) Review and provide recommendations to the Board on the risk aspects of any business development opportunities as may be proposed by Management, ensuring that appropriate due diligence appraisal of any such proposal had been undertaken.
4. Board of Directors Assumes ultimate accountability over the effectiveness of the risk management and internal control system of the Group by establishing and supervising the operation of the risk management framework. OVERVIEW CORPORATE GOVERNANCE 82 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
5. Internal Audit Review and report risk management activities adopted to ensure implementation and its effectiveness to AC.
The ERM process adopted is as follows:-
Identification
Continuous Evaluation monitoring and updates
Risk scoring, moderation and implementation
Significant or Main Principal Risks Relating to Group’s Business
During the financial year ended 31 March 2021, the Group has identified the significant risks that have high potential of impact and likelihood to the overall Group’s operation and at the same time maintains the risk management system to ensure that the corporate objectives and strategies are achieved within the acceptable risk appetite of the Group:
1) Economy Slowdown / Weak Market Sentiment
The Group’s performance is dependent on the performance of the property market. The demand for properties in Klang Valley and Senawang where the Group has developments could be affected by economy slowdown and in particular, weak sentiment in the property market.
The Group addresses this risk by developing innovatively designed and wider range of residential products, constantly enhancing its sales promotion packages so as to be relevant to current market conditions, conducting far reaching advertising and promotional activities as well as engaging closely with end financiers to facilitate loan financing for home buyers.
The Group also has plan to develop and launch more medium to low-medium cost residential units as the demand for this segment remains strong. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 83 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
2) Bribery to Obtain Licences/Permits/Approvals/Certifications
On 1 June 2020, the Malaysian Anti-Corruption Commission Act 2009 introduced section 17A corporate liability provision which applies to all corporates including the Group. In response to this, the Group has established its Anti-Bribery and Corruption (“ABAC”) Framework which sets out the principles and procedures we have put in place to curb bribery and corruption practices in our business. The development of the ABAC Framework was guided by, among others, the Guidelines on Adequate Procedures pursuant to Subsection (5) of Section 17A under the amended MACC Act 2009, as well as other international best practices.
As part of the Adequate Procedures mentioned above, the Group is constantly reminding staff and external parties associated with the Group on consequences of bribery and corruption through email notices, annual staff trainings, annual/biennial acknowledgement of the Group’s ABAC policy by suppliers and contractors.
3) High Inventory Level in the Property Market
The Malaysian property market has been affected by high level of inventory in the past few years. According to National Property Information Centre (NAPIC), the residential overhang at year end 2020 was 29,565 units worth RM18.92 billion. This has adversely affected the demand for the Group’s current residential offerings.
The Group addresses this risk by constantly enhancing its marketing strategies and sales promotional packages, be more innovative in its product development as well as conducting comprehensive market surveys prior to its project launches. The Group will continue with the same strategies going forward.
4) Low tenancy
The Group owns a few investment properties including Menara L&G Putrajaya. Since inception, Menara L&G Putrajaya has suffered low tenancy due to high supply of office spaces in Putrajaya where its location is targeted towards a more niche market.
The Group tries to address this risk by offering competitive rental rates, engaging more external agencies to source for suitable tenants and tight monitoring of operational costs, but it remains a loss-making operation.
The Group has plan to restructure the ownership of Menara L&G Putrajaya under Sri Damansara Sdn Bhd so as to combine all its investment properties into one company wherein there is a dedicated leasing team who can give Menara L&G Putrajaya a better leasing focus. At the same time, the Group is open to exploring a sale of the building if it receives a suitable offer.
5) Social Media
Negative feedback from customers and poor reviews in social media can adversely impact our reputation and branding resulting in lost sales and financial losses to the Group.
The Group closely monitors social media platforms and counters any negative feedbacks with positive statements to protect our reputation and branding. In addition, the Group also engages social medial influencers to boost our brands. OVERVIEW CORPORATE GOVERNANCE 84 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
Recently the Group started a customer care inbox so that grievances can be better channelled and resolved. The Group has also changed tack in its social media engagement by softening its previously hard sell approach by creating relevant content in its social media which will interest potential home buyers, as well as inviting key opinion leaders to share their expertise on our social media to garner more positive feedback and to create better public impressions.
The ERM policy is mandatory for all operating units and forms an integral part of good management practice for the Group. Its purpose is to foster a proactive risk management culture within the Group’s companies and departments.
As at the date of the Annual Report, the ERM framework and the Group risk profile are subject to quarterly review, and as and when necessary.
INTERNAL AUDIT FUNCTIONS
The internal audit function of the Group is carried out by BDO Governance Advisory Sdn Bhd (“BDO”). BDO is an independent professional services provider which supports the Board with much of the assurance it requires regarding the adequacy and effectiveness of the Group’s internal control system.
During the financial year, BDO has tabled the internal audit plan to the AC which outlined the key business operating units’ internal audit review for year 2021/2022 for the AC’s consideration.
Internal audits are undertaken to provide independent assessments of the adequacy, efficiency and effectiveness of the Group’s internal control systems, and reports are made to the AC on a quarterly basis. The AC also has full access to both internal and external auditors and receives reports on all audits performed.
The internal auditor has reviewed the internal controls in the key activities of the Group’s business based on the annual audit plan that was presented to the AC. The internal audit function of the Group adopts a risk-based approach steered by internal policies and procedures and is in-line with the Institute of Internal Auditors’ (IIA) International Professional Practices Framework (IPPF) when preparing its audit strategy and plans, after considering the risk profiles of the operating companies and divisions of the Group. The system of internal control has been structured in such a manner that it has provided reasonable assurance that the likelihood of a significant adverse impact on objectives arising from a future event or situation are at a level acceptable to the business. This is achieved through a combination of preventive, detective and corrective measures.
The audit reports that were tabled to the AC for their deliberation on quarterly basis include management response and corrective actions taken or to be taken in regard to the specific findings and recommendations. The Management as a whole is responsible for ensuring that the necessary corrective actions on reported weaknesses are promptly taken. The AC presents its findings regularly to the Board.
The internal auditor also conducted an independent update review on the ERM Framework based on the internal audit plan and report their findings to the AC for consideration pursuant to Paragraph 15.27(2) of Main Market Listing Requirements. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 85 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
OTHER KEY ELEMENTS OF INTERNAL CONTROL
The other key elements of the Group’s internal control system that are regularly reviewed by the Board are described below:
• Defined appropriate level of delegation and reporting lines of responsibilities to Board Committees and to Management, including organisational structures and appropriate authority levels;
• Documented internal policies and procedures set out in the Group Procedures & Authorities (GPA) Manual, which are periodically reviewed and improved upon to reflect changes in business structures and processes. This provides a sound framework of authority and accountability within the organization and facilitates proper corporate decision making at the appropriate level in the organization’s hierarchy;
• Key operating statistics from the Management on the performance of operating units;
• Annual budgets and the revised budgets before the end of financial year;
• Quarterly financial information reviewed and tabled by the AC;
• Risk management and control framework; and
• The administration, operation, performance and executive management in respect of material joint ventures and associates.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide (“AAPG”) 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the year ended 31 March 2021, and reported to the Board that nothing has come to their attention that cause them to believe that the statement intended to be included in the annual report of the Group, in all material respects:
(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or
(b) is factually inaccurate.
AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problem. OVERVIEW CORPORATE GOVERNANCE 86 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
CONCLUSION
The Board has received assurance from the Managing Director and Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspect, based on the risk management and internal control system of the Group.
The Board is of the view that risk management and internal control system in place for the year under review and up to the date of issuance of the financial statement, is adequate and effective to safeguard shareholders’ investment and the Group’s asset. Notwithstanding this, reviews of all control procedures will be continuously improved and enhancement of the existing system of risk management and internal controls will be made, taking into consideration the changing business environment. FINANCIAL STATEMENTS
FINANCIAL REPORT 88 DIRECTORS’ REPORT 99 NOTES TO THE FINANCIAL STATEMENTS 92 STATEMENTS OF FINANCIAL POSITION 170 STATEMENT BY DIRECTORS 94 STATEMENTS OF PROFIT OR LOSS AND 170 STATUTORY DECLARATION OTHER COMPREHENSIVE INCOME 171 INDEPENDENT AUDITORS’ REPORT 95 STATEMENTS OF CHANGES IN EQUITY 97 STATEMENTS OF CASH FLOWS OVERVIEW CORPORATE GOVERNANCE 88 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2021
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March 2021.
Principal activities
The principal activities of the Company are investment holding, leasing of assets and provision of management services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements.
Other information relating to the subsidiaries are disclosed in Note 5 to the financial statements.
Results
Group Company RM’000 RM’000
Profit for the financial year attributable to: Equity owner to the Company 30,459 15,225 Non-controlling interest 2,671 - 33,130 15,225
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the financial statements.
Dividend
There was no dividend paid in respect of the financial year ended 31 March 2021.
The Directors propose at the forthcoming Annual General Meeting, a dividend in respect of the financial year ended 31 March 2021, of 0.50 sen per share on 2,973,135,003 ordinary shares, amounting to RM14,866,000. The financial statement for the current financial year does not reflect this proposed dividend. This dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profits in the financial year ending 31 March 2022.
Directors of the Company
Directors who served during the financial year until the date of this report are:
• Dato’ Hj Zainal Abidin Bin Putih (Chairman) • Low Gay Teck (Managing Director)** • Dato’ Ir. Dr A. Bakar Jaafar • Dato’ Hj Ikhwan Salim Bin Dato’ Hj Sujak • YM Tengku Maruan Bin Tengku Ariff • Hoong Cheong Thard • Chiu Andrew Wah Wai • Ferdaus Bin Mahmood** • Dato’ Noorizah Binti Hj Abd Hamid
** These directors are also directors of the Company’s subsidiaries. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 89 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2021
The names of the directors of the Company’s subsidiaries in office since the beginning of the financial year to the date of this report (not including those directors listed above) are:
• Abdul Hamid Md Yusof • Abdullah Ali • Yap Yin Kuen • Chin Foo Teck • Rahmat Dahalan • Lau Siang Ee • Chiah Hwa Kai • Tan Boon Siong • Lee Yim Farn • Datuk Kasi A/L K.L. Palaniappan (Resigned on 18 December 2020)
Directors’ interests
The interests and deemed interests in the ordinary shares of the Company and of its related corporations (other than wholly- owned subsidiaries) of those who were Directors at financial year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares At 1.4.2020 Bought Sold At 31.3.2021
The Company Direct interest Tengku Maruan Bin Tengku Ariff 2,000 - - 2,000 Indirect interest Chiu Andrew Wah Wai 1,032,773,600 - - 1,032,773,600 Subsidiary of the Company - Bestari Elsa Sdn. Bhd. Indirect Interest Ferdaus Bin Mahmood 3 44,997 - 45,000
No other directors in office at the end of the financial year had any interest in shares or in debentures of the Company and its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than those benefits included in the aggregate amount of remuneration received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.
There were no arrangements made during and at the end of the financial year, to which the Company is a party, which had the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. OVERVIEW CORPORATE GOVERNANCE 90 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2021
Issue of shares and debentures
There were no changes in issued and paid-up capital of the Company during the financial year. There were no debentures issued during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year.
Indemnity and insurance costs
There was no indemnity given to the Directors, officers and auditors of the Company during the financial year.
During the financial year, a Corporate Liability Insurance (“CLI”) was in place and the total premium of the CLI paid was RM18,830. The premium was borne by the Company and the Directors of the Company.
Other statutory information
Before the financial statements of the Group and the Company were made out, the Directors took reasonable steps to ascertain that: i) all known bad debts have been written off and adequate provision made for doubtful debts; and ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or ii) that would render the value attributed to the current assets in the financial statements of the Group and the Company misleading, or iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and the Company misleading.
At the date of this report, there does not exist: i) any charge on the assets of the Group and the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or ii) any contingent liability in respect of the Group and the Company that has arisen since the end of the financial year. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 91 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2021
No contingent liability or other liability of the Group and the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Company to meet its obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the Group and the Company for the financial year ended 31 March 2021 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.
Auditors
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment. The auditors’ remuneration is disclosed in Note 22 to the financial statements.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Low Gay Teck Director
Ferdaus Bin Mahmood Director
Kuala Lumpur
Date: 11 August 2021 OVERVIEW CORPORATE GOVERNANCE 92 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2021
Group Company 2021 2020 2021 2020 Note RM’000 RM’000 RM’000 RM’000
Assets Property, plant and equipment 3 129,375 135,767 228 330 Investment properties 4 83,663 83,284 22,826 23,241 Investments in subsidiaries 5 - - 976,290 965,433 Investments in associates 6 151,924 153,875 - - Investment in joint ventures 7 17,430 323 - - Inventories 8 570,063 562,058 - - Other investment 9 6,367 7,527 6,367 7,527 Deferred tax assets 10 11,850 10,170 - - Other non-current assets 495 1,014 177 182 Total non-current assets 971,167 954,018 1,005,888 996,713
Inventories 8 458,588 371,250 - - Trade and other receivables 11 33,556 32,471 1,301 463 Other current assets 1,273 1,020 397 234 Contract assets 12 44,560 82,515 - - Contract costs 13 2,536 7,144 - - Tax recoverable 480 3,971 42 - Short-term funds 2,910 3,185 3 59 Deposits, cash and bank balances 14 122,385 110,069 3,846 6,880 Total current assets 666,288 611,625 5,589 7,636 Total assets 1,637,455 1,565,643 1,011,477 1,004,349
Equity Share capital 15 660,232 660,232 660,232 660,232 Retained profits 438,385 407,926 301,782 286,557 Other reserves 14,316 12,121 - - Equity attributable to owners of the Company 1,112,933 1,080,279 962,014 946,789 Non-controlling interests 90,054 87,383 - - Total equity 1,202,987 1,167,662 962,014 946,789 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 93 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2021
Group Company 2021 2020 2021 2020 Note RM’000 RM’000 RM’000 RM’000
Liabilities Provisions 16 3,642 - - - Trade and other payables 17 167 154 - - Borrowings 18 198,424 183,496 102 180 Deferred tax liabilities 10 24,189 25,510 5 - Lease liabilities - 309 - - Total non-current liabilities 226,422 209,469 107 180
Provisions 16 38,678 26,185 10,759 16,813 Trade and other payables 17 131,778 132,710 38,360 40,304 Contract liabilities 12 8,031 5,349 - - Borrowings 18 25,610 22,452 78 75 Tax payable 3,620 1,263 159 188 Lease liabilities 329 553 - - Total current liabilities 208,046 188,512 49,356 57,380 Total liabilities 434,468 397,981 49,463 57,560 Total equity and liabilities 1,637,455 1,565,643 1,011,477 1,004,349
The notes on pages 99 to 169 are an integral part of these financial statements. OVERVIEW CORPORATE GOVERNANCE 94 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Group Company 2021 2020 2021 2020 Note RM’000 RM’000 RM’000 RM’000
Revenue 19 134,892 139,724 19,023 57,069 Other income 20 24,509 23,097 6,256 6,248 Construction contract costs recognised as contract expense (48,758) (60,438) - - Land and other development cost (5,665) (12,968) - - Cost of completed development units sold (10,284) (6,455) - - Staff costs 21 (26,829) (22,727) (4,285) (3,351) Other expenses (28,183) (34,058) (2,905) (6,865) Operating profit 39,682 26,175 18,089 53,101 Finance costs (2,436) (2,620) (2,430) (2,174) Share of results of an associate (1,951) 2,307 - - Share of results of joint ventures 2,968 323 - - Profit before tax 22 38,263 26,185 15,659 50,927 Income tax expense 23 (5,133) (5,552) (434) (860) Profit for the year 33,130 20,633 15,225 50,067
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Foreign currency translation differences for foreign operations 2,195 (164) - - Total comprehensive income for the year 35,325 20,469 15,225 50,067 Profit attributable to: Owners of the Company 30,459 14,891 15,225 50,067 Non-controlling interests 2,671 5,742 - - Profit for the year 33,130 20,633 15,225 50,067 Total comprehensive income attributable to: Owners of the Company 32,654 14,727 15,225 50,067 Non-controlling interests 2,671 5,742 - - Total comprehensive income for the year 35,325 20,469 15,225 50,067 Basic earnings per ordinary share (sen): Basic 24 1.02 0.50
The notes on pages 99 to 169 are an integral part of these financial statements. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 95 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2021
Attributable to owners of the Company Non-distributable Distributable Foreign Non- Share Capital exchange Retained controlling Total Note capital reserve reserve profits Total interests equity Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
1 April 2020 660,232 12,133 (12) 407,926 1,080,279 87,383 1,167,662 Profit for the year - - - 30,459 30,459 2,671 33,130 Other comprehensive income for the year - - 2,195 - 2,195 - 2,195 Total comprehensive income for the year - - 2,195 30,459 32,654 2,671 35,325 Dividend paid to a non-controlling interests - - - - - (2,999) (2,999) Equity injection from non-controlling interest - - - - - 2,999 2,999 Total transactions with owners of the Company ------At 31 March 2021 660,232 12,133 2,183 438,385 1,112,933 90,054 1,202,987
1 April 2019 660,232 12,133 152 422,766 1,095,283 73,698 1,168,981 Profit for the year - - - 14,891 14,891 5,742 20,633 Other comprehensive income for the year - - (164) - (164) - (164) Total comprehensive income for the year - - (164) 14,891 14,727 5,742 20,469 Dividend paid to shareholders 25 - - - (29,731) (29,731) - (29,731) Dividend paid to a non- controlling interests - - - - - (4,999) (4,999) Equity injection from non- controlling interest - - - - - 4,999 4,999 Total transactions with owners of the Company - - - (29,731) (29,731) - (29,731) Acquisition of a new subsidiary 5.1 - - - - - 7,943 7,943 At 31 March 2020 660,232 12,133 (12) 407,926 1,080,279 87,383 1,167,662 OVERVIEW CORPORATE GOVERNANCE 96 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2021
Non- distributable Distributable Share Retained Total Company Note capital profits equity RM’000 RM’000 RM’000
At 1 April 2019 660,232 266,221 926,453 Profit/Total comprehensive income for the year - 50,067 50,067 Transaction with owners Dividend paid to shareholders 25 - (29,731) (29,731) At 31 March 2020/1 April 2020 660,232 286,557 946,789 Profit/Total comprehensive income for the year - 15,225 15,225 At 31 March 2021 660,232 301,782 962,014
The notes on pages 99 to 169 are an integral part of these financial statements. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 97 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2021
Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Cash flows from operating activities Cash receipts from customers 182,477 144,353 - - Cash payments to suppliers and employees (159,034) (168,210) (3,402) (3,131) Dividend received from subsidiaries - - 13,189 51,391 Interest received 3,099 1,571 40 162 Dividend from short-term funds 1,097 3,183 82 294 Tax paid (5,333) (8,293) (500) (672) Tax refund 3,046 945 - 208 Other operating receipts 78 67 119 49 Other operating payments (20,200) (17,397) (1,999) (2,483) Net cash generated from/(used in) operating activities 5,230 (43,781) 7,529 45,818 Cash flows from investing activities Investment in a joint venture (3,975) - - - Net cash outflow arising from acquisition of subsidiaries 5 - (14,231) - (14,233) Purchase of property, plant and equipment (i) (3,793) (23,357) (3) - (Placement)/Withdrawal of deposits with periods more than 3 months (4,594) 880 - - Withdrawals/(Placement) of short - term funds 275 (2,131) 56 (1) Net advances to subsidiaries - - (10,791) (9,723) Net placements of deposits pledged as security for bank guarantee facility (9,237) (350) (2) (5) Distribution of profit from a joint venture 3,882 - - - Others 47 59 47 458 Net cash used in investing activities (17,395) (39,130) (10,693) (23,504) OVERVIEW CORPORATE GOVERNANCE 98 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2021
Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Cash flows from financing activities Drawdown of borrowings 30,042 43,676 - - Repayment of borrowings (17,512) (31,223) (75) (71) Dividend paid to shareholders - (29,731) - (29,731) Equity injection from non-controlling interest 2,999 4,999 - - Dividend paid to non-controlling interest (2,999) (4,999) - - Interest payments (4,551) (10,749) (9) (12) Net cash generated from/(used in) financing activities 7,979 (28,027) (84) (29,814)
Net decrease in cash and cash equivalents (4,186) (110,938) (3,248) (7,500) Cash and cash equivalents at beginning of financial year 90,727 201,900 6,799 14,597 Effects of foreign exchange rate changes 1,065 (235) 212 (298) Cash and cash equivalents at end of financial year 14 87,606 90,727 3,763 6,799
(i) Acquisition of property, plant and equipment
During the financial year, the Company acquired property, plant and equipment with an aggregated cost of RM1,039,000 (2020: RM30,997,000) of which NIL (2020: RM425,000) was interest being capitalised under assets under construction (see Note 3.1) and RM4,644,000 (2020: RM7,398,000) was included in trade and other payables as at year end.
The notes on pages 99 to 169 are an integral part of these financial statements. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 99 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) NOTES TO THE FINANCIAL STATEMENTS
Land & General Berhad is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Securities. The address of the principal place of business and registered office of the Company is as follows:
Registered office 8trium, Level 21, Menara 1 Jalan Cempaka SD 12/5 Bandar Sri Damansara 52200 Kuala Lumpur
Principal place of business 8trium, Level 18-21, Menara 1 Jalan Cempaka SD 12/5 Bandar Sri Damansara 52200 Kuala Lumpur
The consolidated financial statements as at and for the financial year ended 31 March 2021 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interest in associates and joint ventures.
The principal activities of the Company are investment holding, leasing of assets and provision of management services.
The principal activities of the subsidiaries are as stated in Note 5 of the financial statements.
These financial statements were authorised for issue by the Board of Directors on 11 August 2021.
1. BASIS OF PREPARATION
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of Companies Act 2016 in Malaysia.
The following are amendments of the MFRSs that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:
Amendment effective for annual periods beginning on or after 1 June 2020 • Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions
Amendments effective for annual periods beginning on or after 1 January 2021 • Amendments to MFRS 9, Financial Instruments, MFRS 139, Financial Instruments: Recognition and Measurement, MFRS 7, Financial Instruments: Disclosures, and MFRS 16, Leases – Interest Rate Benchmark Reform – Phase 2
Amendment effective for annual periods beginning on or after 1 April 2021 • Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions beyond 30 June 2021 OVERVIEW CORPORATE GOVERNANCE 100 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION (CONT’D)
(a) Statement of compliance (Cont’d)
Amendments effective for annual periods beginning on or after 1 January 2022 • Amendments to MFRS 3, Business Combinations – Reference to the Conceptual Framework • Amendments to MFRS 9, Financial Instruments (Annual Improvements to MFRS Standards 2018−2020) • Amendments to Illustrative Examples accompanying MFRS 16, Leases (Annual Improvements to MFRS Standards 2018−2020) • Amendments to MFRS 116, Property, Plant and Equipment − Proceeds before Intended Use • Amendments to MFRS 137, Provisions, Contingent Liabilities and Contingent Assets − Onerous Contracts − Cost of Fulfilling a Contract • Amendments to MFRS 141, Agriculture (Annual Improvements to MFRS Standards 2018−2020)
Amendments effective for annual periods beginning on or after 1 January 2023 • Amendments to MFRS 101, Presentation of Financial Statements – Classification of Liabilities as Current or Non-current and Disclosures of Accounting Policies • Amendments to MFRS 108, Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates • Amendments to MFRS 112, Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
Amendments effective for annual periods beginning on or after a date yet to be confirmed • Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
The Group and the Company plans to apply the abovementioned amendments:
• from the annual period beginning on 1 April 2021 for the amendment that is effective for annual periods beginning on or after 1 June 2020, 1 January 2021 and 1 April 2021.
• from the annual period beginning on 1 April 2022 for those amendments that are effective for annual periods beginning on or after 1 January 2022.
• from the annual period beginning on 1 April 2023 for those amendments that are effective for annual periods beginning on or after 1 January 2023.
The initial applications of the abovementioned amendments are not expected to have any material financial impact to the current period and prior period financial statements of the Group and the Company.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2 to the financial statements.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 101 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION (CONT’D)
(d) Use of estimates and judgements
The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:
• Note 5 and 6 – Classification of loans as cost of investment • Note 9 – Valuation of fair value of an investment under voluntary suspension • Note 10 – Recognition of deferred tax assets • Note 16 – Provisions • Note 19 – Revenue recognition • Note 31 – Contingent liabilities
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs. Financial instrument (loans or advances) which, in substance, provides current access to the returns associated with an underlying ownership interest; or substantially all of the instrument’s returns are driven by the financial performance of the subsidiaries such that the instrument provides an exposure similar to an investment in ordinary shares of the subsidiary are also accounted for as investment in subsidiaries by the Company. OVERVIEW CORPORATE GOVERNANCE 102 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Basis of consolidation (Cont’d)
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus • the recognised amount of any non-controlling interests in the acquiree; plus • if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less • the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
(iii) Acquisitions of non-controlling interests
The Group accounts all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.
(iv) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 103 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Basis of consolidation (Cont’d)
(v) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss.
When the Group’s interest in an associate decrease but does not result in a loss of significant influence, any retained interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses. The cost of the investment includes transaction costs.
Financial instrument (loans or advances) which, in substance, provides current access to the returns associated with an underlying ownership interest; or substantially all of the instrument’s returns are driven by the financial performance of the associate such that the instrument provides an exposure similar to an investment in ordinary shares of the associate are also accounted for as investment in associates by the Group or the Company. OVERVIEW CORPORATE GOVERNANCE 104 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Basis of consolidation (Cont’d)
(vi) Joint arrangements
Joint arrangements are arrangements of which the Group or the Company have joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements’ returns.
Joint arrangements are classified and accounted for as follows:
• A joint arrangement is classified as “joint operation” when the Group has rights to the assets and obligations for the liabilities relating to an arrangement. The Group or the Company accounts for each of its share of the assets, liabilities and transactions, including its share of those held or incurred jointly with the other investors, in relation to the joint operation. • A joint arrangement is classified as “joint venture” when the Group has rights only to the net assets of the arrangements. The Group accounts for its interest in the joint venture using the equity method as disclosed in Note 2(a)(v).
Financial instrument (loans or advances) which, in substance, provides current access to the returns associated with an underlying ownership interest, or substantially all of the instrument’s returns are driven by the financial performance of the joint venture such that the instrument provides an exposure similar to an investment in ordinary shares of the joint venture are also accounted for as investment in joint venture by the Group.
(vii) Non-controlling interests
Non-controlling interests at the end of the reporting year, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statements of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non- controlling interests to have a deficit balance.
(viii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates and joint venture are eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 105 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting year are retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value is determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising from a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the foreign exchange reserve in equity.
(ii) Operations denominated in functional currencies other than Ringgit Malaysia
The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting year. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign exchange reserve in equity. However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the foreign exchange reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. OVERVIEW CORPORATE GOVERNANCE 106 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(c) Financial instruments
(i) Recognition and initial measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without significant financing component) or a financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issuance. A trade receivable without a significant financing component is initially measured at the transaction price.
(ii) Financial instrument categories and subsequent measurement
Financial assets
Categories of financial assets are determined on initial recognition and are not reclassified subsequent to their initial recognition unless the Group or the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change of the business model.
(a) Amortised cost
Amortised cost category comprises financial assets that are held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The financial assets are not designated as fair value through profit or loss. Subsequent to initial recognition, these financial assets are measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Interest income is recognised by applying effective interest rate to the gross carrying amount except for credit impaired financial assets (see Note 2(m)(i)) where the effective interest rate is applied to the amortised cost.
(b) Fair value through other comprehensive income
Equity investments
This category comprises investment in equity that is not held for trading, and the Group and the Company irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by- investment basis. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of investment. Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are not reclassified to profit or loss.
At this juncture, the Group and the Company has not elected to present subsequent changes on any of its investment’s fair value in other comprehensive income. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 107 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(c) Financial instruments (Cont’d)
(ii) Financial instrument categories and subsequent measurement (Cont’d)
Financial assets (Cont’d)
(c) Fair value through profit or loss
All financial assets not measured at amortised cost or fair value through other comprehensive income as described above are measured at fair value through profit or loss. This includes derivative financial assets (except for a derivative that is a designated and effective hedging instrument). On initial recognition, the Group or the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at fair value through other comprehensive income as at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets categorised as fair value through profit or loss are subsequently measured at their fair value. Net gains or losses, including any interest or dividend income, are recognised in the profit or loss.
All financial assets, except for those measured at fair value through profit or loss and equity investments measured at fair value through other comprehensive income, are subject to impairment assessment (see Note 2(m)(i)).
Financial liabilities
The categories of financial liabilities at initial recognition are as follows:
(a) Fair value through profit or loss
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument), contingent consideration in a business combination and financial liabilities that are specifically designated into this category upon initial recognition.
On initial recognition, the Group or the Company may irrevocably designate a financial liability that otherwise meets the requirements to be measured at amortised cost as at fair value through profit or loss:
(i) if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise;
(ii) a group of financial liabilities or assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the Group’s key management personnel; or
(iii) if a contract contains one or more embedded derivatives and the host is not a financial asset in the scope of MFRS 9, where the embedded derivative significantly modifies the cash flows and separation is not prohibited. OVERVIEW CORPORATE GOVERNANCE 108 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(c) Financial instruments (Cont’d)
(ii) Financial instrument categories and subsequent measurement (Cont’d)
Financial liabilities (Cont’d)
(a) Fair value through profit or loss (Cont’d)
Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair value with gains or losses, including any interest expense are recognised in the profit or loss.
For financial liabilities where it is designated as fair value through profit or loss upon initial recognition, the Group and the Company recognise the amount of change in fair value of the financial liability that is attributable to change in credit risk in the other comprehensive income and remaining amount of the change in fair value in the profit or loss, unless the treatment of the effects of changes in the liability’s credit risk would create or enlarge an accounting mismatch.
(b) Amortised cost
Other financial liabilities not categorised as fair value through profit or loss are subsequently measured at amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognised in the profit or loss. Any gains or losses on derecognition are also recognised in the profit or loss.
(iii) Regular way purchase or sale of financial assets
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date or settlement date accounting in the current year.
Trade date accounting refers to:
(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and
(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.
Settlement date accounting refers to:
(a) the recognition of an asset on the day it is received by the Group or the Company, and
(b) derecognition of an asset and recognition of any gain or loss on disposal on the day that is delivered by the Group or the Company.
Any change in the fair value of the asset to be received during the period between the trade date and the settlement date is accounted in the same way as it accounts for the acquired asset.
Generally, the Group or the Company applies settlement date accounting unless otherwise stated for the specific class of asset. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 109 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(c) Financial instruments (Cont’d)
(iv) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of:
• the amount of the loss allowance; and • the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance to the principles of MFRS 15, Revenue from Contracts with Customers.
Liabilities arising from financial guarantees are presented together with other provisions.
(v) Derecognition
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expired or transferred, or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount of the financial asset and the sum of consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged, cancelled or expired. A financial liability is also derecognised when its terms are modified and the cash flows of the modified liability are substantially different, in which case, a new financial liability based on modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
(vi) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group or the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and liability simultaneously.
(d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. OVERVIEW CORPORATE GOVERNANCE 110 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(d) Property, plant and equipment (Cont’d)
(i) Recognition and measurement (Cont’d)
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within “other income” and “other expenses” respectively in profit or loss.
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative years are as follows:
• Buildings 10 – 50 years • Other plant and equipment 2.5 – 10 years • Sales gallery 5 – 10 years
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting year and adjusted as appropriate. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 111 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Leases
(i) Definition of a lease
A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
• the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; • the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and • the customer has the right to direct the use of the asset. The customer has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the customer has the right to direct the use of the asset if either the customer has the right to operate the asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand- alone prices. However, for leases of properties in which the Group is a lessee, it has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component.
(ii) Recognition and initial measurement
(a) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entities’ average borrowing rate. Generally, the Group entities use their average borrowing rate as the discount rate. OVERVIEW CORPORATE GOVERNANCE 112 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Leases (Cont’d)
(ii) Recognition and initial measurement (Cont’d)
(a) As a lessee (Cont’d)
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in-substance fixed payments less any incentives receivable; • variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; • amounts expected to be payable under a residual value guarantee; • the exercise price under a purchase option that the Group is reasonably certain to exercise; and • penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The Group excludes variable lease payments that linked to future performance or usage of the underlying asset from the lease liability. Instead, these payments are recognised in profit or loss in the period in which the performance or use occurs.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight- line basis over the lease term.
(b) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease.
If an arrangement contains lease and non-lease components, the Group applies MFRS 15 to allocate the consideration in the contract based on the stand-alone selling prices.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. It assesses the lease classification of a sublease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sublease as an operating lease. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 113 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Leases (Cont’d)
(iii) Subsequent measurement
(a) As a lessee
The right-of-use asset is subsequently depreciated using the straight- line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of the right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a revision of in-substance fixed lease payments, or if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
(b) As a lessor
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of “other income”.
(f) Investment properties
Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods and services or for administrative purposes.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at costs less any accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the investment property.
Freehold land has an unlimited life and therefore is not depreciated. Investment properties carried at cost are depreciated over the economic useful life ranging from 20 to 50 years.
An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in the year in which the item is derecognised. OVERVIEW CORPORATE GOVERNANCE 114 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(g) Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect of equity-accounted associates and joint venture, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity- accounted associates and joint venture.
(h) Biological assets and bearer plant
Biological assets comprised produce growing on trees and bamboo stalks are measured at fair values less costs of disposal. Any gains or losses arising from changes in the fair values less costs of disposal are recognised in profit or loss. Fair value is determined based on the present value of expected net cash flows from the biological assets. The expected net cash flows are estimated using the expected output method and the estimated market price of the biological assets.
Bearer plant is accounted for as property, plant and equipment. All costs relating to bearer plants are capitalised until such time the bearer plants reach maturity, at which point all further costs are expensed and depreciation commences. Costs to reach maturity include seedling and planting costs, other upkeep costs and an allocation of overhead costs.
The estimated useful lives for the current and comparative years is as follows:
• Bearer plants – oil palm 25 years • Bamboo stalks 25 years
(i) Inventories
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated costs necessary to make the sale.
(i) Land held for property development
Land held for property development consists of land or such portions thereof on which no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets.
Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.
Cost of land held for property development is measured based on specific identification basis.
(ii) Property development in progress and completed development units
Property development in progress and completed development units comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities, including interest expense incurred before available for sale during the period of active development.
Cost of completed development units are measured based on specific identification basis. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 115 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(i) Inventories (Cont’d)
(iii) Consumables
Cost of consumables is measured based on the first-in first-out basis and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition.
(j) Contract asset/Contract liability
A contract asset is recognised when the Group’s or the Company’s right to consideration is conditional on something other than the passage of time. A contract asset is subject to impairment (see Note 2(m)(i)).
A contract liability is stated at cost and represents the obligation of the Group or the Company to transfer goods or services to a customer for which consideration has been received (or the amount is due) from the customers.
(k) Contract cost
(i) Incremental cost of obtaining a contract
The Group or the Company recognises incremental costs of obtaining contracts when the Group or the Company expects to recover these costs.
Costs of obtaining a contract is initially measured at cost and amortised on a systematic basis that is consistent with the pattern of revenue recognition to which the asset relates.
(ii) Cost to fulfil a contract
The Group or the Company recognises a contract cost that relate directly to a contract or to an anticipated contract as an asset when the cost generates or enhances resources of the Group or the Company, will be used in satisfying performance obligations in the future and it is expected to be recovered. All other costs to fulfill contracts are expensed to profit or loss.
An impairment loss is recognised in the profit and loss when the carrying amount of the contract cost exceeds the expected revenue less expected cost that will be incurred. Where the impairment condition no longer exists or has improved, the impairment loss is reversed to the extent that the carrying amount of the contract cost does not exceed the amount that would have been recognised had there been no impairment loss recognised previously.
(l) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value with original maturities of three months or less, and are used by the Group and the Company in the management of their short-term commitments. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of pledged deposits and bank overdraft. OVERVIEW CORPORATE GOVERNANCE 116 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(m) Impairment
(i) Financial assets
The Group and the Company recognise loss allowances for expected credit losses on financial assets measured at amortised cost, debt investments measured at fair value through other comprehensive income, contract assets and lease receivables. Expected credit losses are a probability-weighted estimate of credit losses.
The Group and the Company measure loss allowances at an amount equal to lifetime expected credit loss, except for debt securities that are determined to have low credit risk at the reporting date, cash and bank balance and other debt securities for which credit risk has not increased significantly since initial recognition, which are measured at 12-month expected credit loss. Loss allowances for trade receivables, contract assets and lease receivables are always measured at an amount equal to lifetime expected credit loss.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit loss, the Group and the Company consider reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information, where available.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of the asset, while 12- month expected credit losses are the portion of expected credit losses that result from default events that are possible within the 12 months after the reporting date. The maximum period considered when estimating expected credit losses is the maximum contractual period over which the Group and the Company are exposed to credit risk.
The Group and the Company estimate the expected credit losses on trade receivables using a provision matrix with reference to historical credit loss experience.
An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss and the carrying amount of the asset is reduced through the use of an allowance account.
At each reporting date, the Group and the Company assess whether financial assets carried at amortised cost and debt securities at fair value through other comprehensive income are credit-impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The gross carrying amount of a financial asset is written off (either partially or full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s or the Company’s procedures for recovery amounts due. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 117 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(m) Impairment (Cont’d)
(ii) Other assets
The carrying amounts of other assets (except for inventories, contract assets, lease receivables and deferred tax asset) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash- generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to a cash-generating unit or a group of cash-generating units that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then to reduce the carrying amounts of the other assets in the cash- generating unit (groups of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised. OVERVIEW CORPORATE GOVERNANCE 118 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(n) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i) Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.
(ii) Ordinary shares
Ordinary shares are classified as equity.
(o) Employee benefits
(i) Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
(ii) Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Group makes contributions to the Employees’ Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the year in which the related service is performed.
(iii) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring.
(p) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre- tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 119 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(q) Revenue and other income
(i) Contract with customers
Revenue from contract with customers is measured based on the consideration specified in a contract with a customer in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. The Group or the Company recognises revenue when (or as) it transfers control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the asset. Depending on the terms of the contract, control of the assets may be transferred over time or at a point in time.
The Group or the Company transfers control of a good or service at a point in time unless one of the following over time criteria is met:
(a) the customer simultaneously received and consumes the benefits provided as the Group or the Company performs;
(b) the Group’s or the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
(c) the Group’s or the Company’s performance does not create an asset with an alternative use and the Group or the Company has an enforceable right to payment for performance completed to date.
If control of the assets is transferred over time, revenue is recognised over the period of the contract by reference to the progress towards the satisfaction of each of those performance obligations. Otherwise, revenue is recognised at a point in time when the customer obtain control over the goods or service.
(ii) Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
(iii) Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.
(iv) Leasing income
Leasing income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of lease income over the lease term on a straight-line basis. OVERVIEW CORPORATE GOVERNANCE 120 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(r) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
(s) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting year, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting year.
The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting year and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 121 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(t) Earnings per ordinary share
The Group presents basic earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the financial year, adjusted for own shares held.
(u) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segment results are reviewed regularly by the chief operating decision maker, which in this case is the Managing Director together with the Board of Directors of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
(v) Contingencies
Contingent liabilities
Where it is not probable that an outflow of economic benefit will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
(w) Fair value measurement
Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value is categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers. OVERVIEW CORPORATE GOVERNANCE 122 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
3. PROPERTY, PLANT AND EQUIPMENT
Other plant Freehold and Sales Bearer Group land Buildings equipment gallery plants Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost At 1 April 2020 50,037 86,148 22,489 14,688 7,104 180,466 Additions - 122 657 46 214 1,039 Disposals - - (198) - - (198) Written off - (10,443) (2,542) (42) - (13,027) Reclass to investment properties (1,821) - - - - (1,821) At 31 March 2021 48,216 75,827 20,406 14,692 7,318 166,459
Accumulated depreciation At 1 April 2020 - 22,449 15,906 4,969 1,375 44,699 Charge for the year - 1,529 1,490 2,189 355 5,563 Disposals - - (198) - - (198) Written off - (10,443) (2,537) - - (12,980) At 31 March 2021 - 13,535 14,661 7,158 1,730 37,084
Carrying amounts At 1 April 2020 50,037 63,699 6,583 9,719 5,729 135,767 At 31 March 2021 48,216 62,292 5,745 7,534 5,588 129,375 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 123 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Other Assets Freehold plant and Sales under Bearer Group land Buildings equipment gallery construction plants Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost At 1 April 2019 50,037 44,912 19,145 14,292 14,070 7,104 149,560 Additions - 7,870 877 396 21,854 - 30,997 Disposals - - (17) - - - (17) Written off - - (74) - - - (74) Reclassification - 33,366 2,558 - (35,924) - - At 31 March 2020 50,037 86,148 22,489 14,688 - 7,104 180,466
Accumulated depreciation At 1 April 2019 - 21,343 14,715 2,296 - 953 39,307 Charge for the year - 1,106 1,207 2,673 - 422 5,408 Disposals - - (16) - - - (16) At 31 March 2020 - 22,449 15,906 4,969 - 1,375 44,699
Accumulated impairment At 1 April 2019 - - 73 - - - 73 Written off - - (73) - - - (73) At 31 March 2020 ------
Carrying amounts At 1 April 2019 50,037 23,569 4,357 11,996 14,070 6,151 110,180 At 31 March 2020 50,037 63,699 6,583 9,719 - 5,729 135,767 OVERVIEW CORPORATE GOVERNANCE 124 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
3.1 Included in the assets under construction during the financial year is:
Group 2021 2020 RM’000 RM’000
Interest expense capitalised - 425
The capitalisation rate in 2020 was 5.47%.
3.2 The following assets are charged to a bank as security for a term loan facility granted to a subsidiary (see Note 18):
Group
2021 2020 RM’000 RM’000
Buildings 51,575 52,708 Other plant and equipment 4,273 4,508 55,848 57,216
Furniture, Motor fittings and Company vehicles equipment Total RM’000 RM’000 RM’000
Cost At 1 April 2019/31 March 2020 /1 April 2020 725 1,015 1,740 Additions - 3 3 Disposals (166) (692) (858) At 31 March 2021 559 326 885
Accumulated depreciation At 1 April 2019 322 982 1,304 Charge for the year 95 11 106 At 31 March 2020/1 April 2020 417 993 1,410 Charge for the year 95 7 102 Disposals (166) (689) (855) At 31 March 2021 346 311 657
Carrying amounts At 1 April 2019 403 33 436 At 31 March 2020/1 April 2020 308 22 330 At 31 March 2021 213 15 228 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 125 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
4. INVESTMENT PROPERTIES
Group Company Freehold Freehold land Buildings Total land Buildings Total Cost RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 April 2019/31 March 2020/ 12,055 79,771 91,826 11,988 20,720 32,708 1 April 2020 Additions - 85 1,906 - - - Reclass from property, plant and equipment 1,821 - - - - - At 31 March 2021 13,876 79,856 93,732 11,988 20,720 32,708
Accumulated depreciation At 1 April 2019 - 7,015 7,015 - 9,052 9,052 Charge for the year - 1,527 1,527 - 415 415 At 31 March 2020/1 April 2020 - 8,542 8,542 - 9,467 9,467 Charge for the year - 1,527 1,527 - 415 415 At 31 March 2021 - 10,069 10,069 - 9,882 9,882
Carrying Amounts At 1 April 2019 12,055 72,756 84,811 11,988 11,668 23,656 At 31 March 2020/1 April 2020 12,055 71,229 83,284 11,988 11,253 23,241 At 31 March 2021 13,876 69,787 83,663 11,988 10,838 22,826
(a) The fair value of investment properties of the Group and of the Company are as follows:
Note 2021 2020 RM’000 RM’000
Group Land 59,031 16,092 Building 136,171 151,418 (i) 195,202 167,510 Company Land 18,123 16,092 Building 70,716 56,414 (ii) 88,839 72,506 OVERVIEW CORPORATE GOVERNANCE 126 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
4. INVESTMENT PROPERTIES (CONT’D)
(a) The fair value of investment properties of the Group and of the Company are as follows (Cont’d):
There were no transfers between Level 1, Level 2 and Level 3 fair value measurements during the financial years ended 31 March 2021 and 31 March 2020.
(i) The fair value of the investment properties of the Group are categorised at Level 3.
In the current year, the land and building are valued by reference to transactions of similar land surrounding with appropriate adjustments made for differences in the relevant characteristics of the land and buildings without involvement of external valuer.
Sales price of comparable land and buildings in close proximity are adjusted for differences in key attributes such as property sizes. The most significant unobservable input into this valuation approach is price per square foot. The estimated fair value would increase/(decrease) if the price per square foot is higher/(lower).
(ii) The fair value of the investment properties of the Company are categorised at Level 3.
The land is valued by reference to transactions of similar land surrounding with appropriate adjustments made for differences in the relevant characteristics of the land. Sales price of comparable land in close proximity are adjusted for differences in key attributes such as property sizes. The most significant unobservable input into this valuation approach is price per square foot. The estimated fair value would increase/(decrease) if the price per square foot is higher/(lower).
The fair value of building is based on the discounted cash flow method by taking into account of future rental income, direct operating expenses and risk-adjusted discount rate.
Inter-relationship between significant unobservable inputs and fair Significant unobservable inputs value measurement
Risk-adjusted discount rates The estimated fair value would increase/(decrease) if risk-adjusted 4.10% (2020: 5.14%) discount rates were (lower)/higher.
(b) The operating lease payments to be received are as follows:
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Less than 1 year 2,617 2,524 2,414 3,113 1 to 2 years 269 2,404 6 2,331 2 to 3 years - 183 - - Total undiscounted lease payments 2,886 5,111 2,420 5,444 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 127 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
5. INVESTMENTS IN SUBSIDIARIES
Company 2021 2020 RM’000 RM’000
Cost of investment 1,096,261 1,062,162 Less: Accumulated impairment losses (119,971) (96,729) 976,290 965,433
Details of the subsidiaries are as follows:
Principal place of Effective ownership business/Country interest and Name of subsidiaries of incorporation Principal activities voting interest 2021 2020 % %
Bestform Limited* Isle of Man Investment holding but in 100.00 100.00 the process of voluntary liquidation Bright Term Sdn. Bhd. Malaysia Property development 100.00 100.00 Clarity Crest Sdn. Bhd. Malaysia Cultivation of bamboo, rubber 100.00 100.00 and oil palm Elite Land Development Sdn. Bhd. Malaysia Property development 65.00 65.00 Forward Esteem Sdn. Bhd. Malaysia Property development 100.00 100.00 L&G Resources (1994), Inc.* USA Dormant 100.00 100.00 Land & General Properties Sdn. Bhd. Malaysia Property management 100.00 100.00 Land & General Australia (Holdings) Australia Investment holding 100.00 100.00 Pty Ltd* Lang Education Holdings Sdn. Bhd. Malaysia Investment holding 100.00 100.00 Lang Furniture (Pahang) Sdn. Bhd. Malaysia Dormant 100.00 100.00 Maple Domain Sdn. Bhd. Malaysia Property investment 100.00 100.00 Pillar Quest Sdn. Bhd. Malaysia Investment holding 100.00 100.00 Primal Milestone Sdn. Bhd. Malaysia Investment holding 100.00 100.00 Quantum Bonus Sdn. Bhd. Malaysia Investment holding 100.00 100.00 Soho Prestige Sdn. Bhd. Malaysia Property development 100.00 100.00 Sri Damansara Sdn. Bhd. Malaysia Property development and 100.00 100.00 property investment Success View Sdn. Bhd. Malaysia Investment holding 100.00 - Syarikat Trimal Sdn. Bhd. Malaysia Property development 100.00 100.00 Synergy Score Sdn. Bhd. Malaysia Investment holding 100.00 100.00 OVERVIEW CORPORATE GOVERNANCE 128 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
5. INVESTMENTS IN SUBSIDIARIES (CONT’D)
Details of the subsidiaries are as follows: (Cont’d)
Principal place of Effective ownership business/Country interest and Name of subsidiaries of incorporation Principal activities voting interest 2021 2020 % %
Triumph Bliss Sdn. Bhd. Malaysia Property development 100.00 100.00 Victory Vista Sdn. Bhd. Malaysia Investment holding 100.00 100.00 Winlink Pte Ltd* Singapore Dormant but in the process of 100.00 100.00 voluntary liquidation Subsidiaries of Land & General Australia (Holdings) Pty Ltd: Lang Melbourne Pty Ltd* Australia Dormant 100.00 100.00 World Trade Centre Holdings Pty Ltd* Australia Dormant 100.00 100.00 Flinders Wharf Pty Ltd* Australia Dormant 100.00 100.00 Flinders Wharf One Pty Ltd* Australia Dormant 100.00 100.00 Flinders Wharf Two Pty Ltd* Australia Dormant 100.00 100.00 PLR Mayfields Pty Ltd* Australia Dormant 100.00 100.00 Subsidiary of L&G Resources (1994), Inc.: L&G Display Technologies, Inc.* USA Dormant 100.00 100.00 Subsidiary of Lang Education Holdings Sdn. Bhd.: Lang Education Sdn. Bhd. Malaysia Education services 100.00 100.00 Subsidiary of Lang Education Sdn. Bhd.: Bestari Elsa Sdn. Bhd. Malaysia Dormant 70.00 70.00 Subsidiary of Pillar Quest Sdn. Bhd.: Xtreme Meridian Sdn. Bhd. Malaysia Property development 50.01 50.01 Subsidiary of Sri Damansara Sdn. Bhd.: Sri Damansara Club Bhd. Malaysia Dormant 100.00 100.00 Subsidiaries of Syarikat Trimal Sdn. Bhd.: Mentari Unggul Sdn. Bhd. Malaysia Dormant 100.00 100.00 Tinvein Nominees Sdn. Bhd. Malaysia Dormant 100.00 100.00 Subsidiary of Synergy Score Sdn. Bhd.: Elite Forward Sdn. Bhd. Malaysia Property development 50.01 50.01 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 129 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
5. INVESTMENTS IN SUBSIDIARIES (CONT’D)
Details of the subsidiaries are as follows: (Cont’d)
Principal place of Effective ownership business/Country interest and Name of subsidiaries of incorporation Principal activities voting interest 2021 2020 % %
Subsidiary of Victory Vista Sdn. Bhd.: Pembinaan Jaya Megah Sdn. Bhd. Malaysia Property development 100.00 100.00 Subsidiary of World Trade Centre Holdings Pty Ltd: Lang Australia Pty Ltd* Australia Dormant 100.00 100.00
* Audited by a firm of auditors other than KPMG PLT.
5.1 Asset acquisition of a subsidiary in prior year
In the previous year, the Group acquired 65% equity interest in Elite Land Development Sdn. Bhd. (formerly known as Kasi Palani Development Sdn. Bhd.) for a total cash consideration of RM14,233,000 on 15 November 2019, which can be analysed as follows:
Total RM’000
Land held for development 22,695 Cash and bank balances 2 Other net liabilities (521) Total net cash consideration 22,176 Less: Net cash consideration paid by non-controlling interests (7,943) Net cash consideration 14,233 Less: Cash and bank balance at acquisition date (2) Net cash outflow 14,231 OVERVIEW CORPORATE GOVERNANCE 130 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
5. INVESTMENTS IN SUBSIDIARIES (CONT’D)
5.2 Non-controlling interests in subsidiaries
The following table summarises the financial information of the Group’s material non-controlling interests (“NCI”) in Elite Forward Sdn. Bhd. (“EFSB”), Xtreme Meridian Sdn. Bhd. (“XMSB”) and Elite Land Development Sdn. Bhd. (“ELDSB”):
EFSB XMSB ELDSB Total 2021 2020 2021 2020 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
NCI percentage of ownership interest and voting interest 49.99% 49.99% 49.99% 49.99% 35.00% 35.00% - - Carrying amount of NCI 7,095 10,117 75,036 69,331 7,923 7,935 90,054 87,383 (Loss)/Profit allocated to NCI (23) 340 2,706 5,410 (12) (8) 2,671 5,742
Non-current assets 3 4 2,188 3,627 22,690 22,695 24,881 26,326 Current assets 14,676 21,414 320,065 302,839 19 2 334,760 324,255 Non-current liabilities - - (83,536) (79,247) - - (83,536) (79,247) Current liabilities (487) (1,180) (88,614) (88,530) (73) (26) (89,174) (89,736) Net assets 14,192 20,238 150,103 138,689 22,636 22,671 186,931 181,598
Year ended 31 March Revenue 3,791 7,817 32,103 71,469 - - 35,894 79,286 (Loss)/Profit for the year (45) 680 5,413 10,822 (34) (24) 5,334 11,478
Dividends paid to NCI (2,999) (4,999) - - - - (2,999) (4,999)
Cash flows generated from/ (used in) operating activities 4,567 6,681 (5,007) (9,444) (10) - (450) (2,763) Cash flows (used in)/ generated from investing activities (34) - 5,962 9,931 - - 5,928 9,931 Cash flows (used in)/ generated from financing activities (6,000) (10,000) (2,004) 197 27 - (7,977) (9,803) Net (decrease)/increase in cash and cash equivalents (1,467) (3,319) (1,049) 684 17 - (2,499) (2,635) OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 131 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
5. INVESTMENTS IN SUBSIDIARIES (CONT’D)
5.3 Loans or advances to subsidiaries
Included in cost of investment were loans or advances to subsidiaries with nominal value of RM54,468,000 (2020: RM56,162,000). These loans or advances were classified as cost of investment in subsidiaries. The loans or advances do not have fixed repayment terms and after considering the capital structure of the subsidiaries, the management is of the view that, in substance, the loans and advances provided an exposure similar to an investment in ordinary shares of the subsidiaries. Consequently after the financial year end, the said advance of RM53,440,000 was converted into preference shares.
6. INVESTMENTS IN ASSOCIATES
Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Cost of investment 6.1 152,877 152,877 500 500 Share of post-acquisition profit 522 2,473 - - 153,399 155,350 500 500 Less: Accumulated impairment losses (1,475) (1,475) (500) (500) 151,924 153,875 - -
6.1 The cost of investment includes loans granted to the associate of RM136,950,000 (2020: RM136,950,000) with nominal value of RM196,365,000 (2020: RM196,365,000) as the loans provide an exposure similar to an investment in ordinary shares of the associate. The loans are exposed to changes in the fair value of the associate’s net assets and hence, the associate’s losses. Furthermore, the shareholders are required to provide financing to the associate in proportion to their respective shareholdings in the associate. This demonstrates that the loans granted links directly to ownership. Consequently after the financial year end, the said loans were converted to preference shares.
Details of the associates, all of which are incorporated in Malaysia and the Company’s interests therein, are as follows:
Principal place of Effective ownership business/ Country interest and voting Name of Associates of incorporation Principal activity interest 2021 2020 % %
C.I. Damansara Quarry Sdn. Bhd. Malaysia Dormant 35.00 35.00 Projass Langbuilt Sdn. Bhd. Malaysia Dormant 50.00 50.00 FW Financing Solutions Pty Ltd Australia Dormant 50.00 50.00
Held through Primal Milestone Sdn. Bhd. and Quantum Bonus Sdn. Bhd. Country Garden Properties (Malaysia) Malaysia Property development 45.00 45.00 Sdn. Bhd. (“CGPM”) OVERVIEW CORPORATE GOVERNANCE 132 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
6. INVESTMENTS IN ASSOCIATES (CONT’D)
The following summarises the information of the Group’s material associate:
Group 2021 2020 RM’000 RM’000
CGPM Non-current assets 217,498 213,968 Current assets 357,590 339,255 Non-current liabilities (49,649) (51,373) Current liabilities (187,831) (159,905) Net assets 337,608 341,945
Year ended 31 March (Loss)/Profit/Total comprehensive (expense)/income (4,336) 5,126
Reconciliation of net assets to carrying amount as at 31 March Group’s share of net assets 151,924 153,875
Group’s share of results for the year ended 31 March Group’s share of total comprehensive (expense)/income (1,951) 2,307
Other information
The Group invests in CGPM because it is operating in the property development industry, which is the Group’s main operating segment.
7. INVESTMENT IN JOINT VENTURES
Group 2021 2020 RM’000 RM’000
Cost of investment 23,346 16,252 Share of post-acquisition (loss)/profit, net of distribution (390) 323 22,956 16,575 Less: Accumulated impairment losses (5,526) (16,252) 17,430 323
7.1 The cost of investment includes loans granted to a joint venture of RM19,371,000 (2020: RM16,252,000) as the loans provide an exposure similar to an investment in ordinary shares of the joint venture. The loans are exposed to changes in the fair value of the joint venture’s net assets and hence, the joint venture’s profits. Furthermore, the shareholders are required to provide financing to the joint venture in proportion to their respective shareholdings in the joint venture. This demonstrates that the loans granted links directly to ownership. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 133 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
7. INVESTMENT IN JOINT VENTURES (CONT’D)
Movements on the Group’s loss allowances for investment in joint venture, Hidden Valley Australia Pty Ltd (“HV”) are as follows:
2021 2020 RM’000 RM’000
Group At 1 April 16,252 16,252 Impairment loss reversed (Note 20) (12,770) - Forex translation 2,044 - At 31 March 5,526 16,252
Reversal of impairment loss of joint venture, Hidden Valley Australia Pty Ltd (“HV”)
At the reporting date, the Group conducted an impairment review of its interests in a joint venture since the joint venture has turned around its operations from an accumulated losses position in the previous years to a retained profits position in financial year ended 31 March 2020 and in the position to distribute its profit in the current financial year.
The recoverable amount of the joint venture is determined using value-in-use. Based on management’s assessment, a reversal of impairment of RM12,770,000 has been recognised in the current financial year.
The value-in-use is calculated by discounting the cash flow projections over five-year period. The management has applied a pre-tax discount rate of 6.47%.
The value-in-use of the joint venture is most sensitive to the expected timing on repayment period over five years.
Details of the joint venture are as follows:
Principal place of Effective ownership business/ Country interest and voting Name of joint venture of incorporation Principal activity interest 2021 2020 % %
Hidden Valley Australia Pty Ltd (“HV”) Australia Property development 50 50 Pacific Parkland Sdn. Bhd. (“PPSB”) Malaysia Property development 30 -
The Group subscribed to 75,000 ordinary shares at a subscription price of RM75,000 in PPSB via its wholly-owned subsidiary, Success View Sdn. Bhd. (“SVSB”) on 19 November 2020, representing 30% equity interest in PPSB.
On 23 November 2020, the Group via SVSB subscribed 3,900,000 new redeemable preference shares at a subscription price of RM3,900,000 into PPSB, being 30% equity interest in the proposed acquisition and development of a commercial freehold land held under Title No. Geran 312795, Lot 25300 in the Mukim of Semenyih, District of Ulu Langat, in the state of Selangor. OVERVIEW CORPORATE GOVERNANCE 134 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
7. INVESTMENT IN JOINT VENTURES (CONT’D)
Summarised financial information of 2021 and 2020 have not been included as the joint ventures are not individually material to the Group.
Other information
The Group invests in HV and PPSB because they are operating in the property development industry, which is the Group’s main operating segment.
8. INVENTORIES
Group Note 2021 2020 RM’000 RM’000
Non-current Land held for property development - Freehold land 156,019 156,019 - Leasehold land 325,696 325,696 - Development cost 88,348 80,343 8.1 570,063 562,058
Current Property development units in progress 8.2 316,252 340,334 Completed development units 142,080 30,844 Others 256 72 458,588 371,250 Total inventories 1,028,651 933,308
Land together with development costs with a carrying value of RM583,874,000 (2020: RM528,333,000) are pledged as securities for bank borrowings as disclosed in Note 18.
8.1 Included in land held for property development during the financial year is:
Group 2021 2020 RM’000 RM’000
Interest expense capitalised - 1,619
The capitalisation rate in 2020 was between 4.27% to 5.47% per annum. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 135 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
8. INVENTORIES (CONT’D)
8.2 Included in property development cost incurred during the financial year is:
Group 2021 2020 RM’000 RM’000
Interest expense capitalised 8,597 8,367
The capitalisation rate is ranging from 3.95% to 4.53% (2020: 4.72% to 5.35%) per annum.
8.3 During the year, the cost of completed development units recognised as expenses in profit or loss was RM10,284,000 (2020: RM6,455,000).
9. OTHER INVESTMENT
Group and Company 2021 2020 RM’000 RM’000
Investment measured at fair value through profit or loss 6,367 7,527
This refers to the Company’s investments in Vietnam Industrial Investments Ltd (“VII”) which is a quoted investment in the Australian Securities Exchange (“ASX”).
VII Shares were suspended from trading from 16 September 2019 and the last traded price was AUD0.31 per share. Subsequently, the voluntary suspension was further extended up-to-date and the half year interim financial statements for the year ended 30 June 2020 announced in May 2021 was issued with a disclaimer audit opinion due to inability to obtain sufficient audit evidence on the following:
i. VII Group’s loans, advances and receivables due from its strategic partner, Nam Thuan Steel Joint Stock Company (formerly Nam Thuan Investment Development Ltd (“Nam Thuan”)) ii. VII’s Group’s SSESTEEL Ltd Cash Generating Unit’s property, plant and equipment iii. Assessment of strategic supply arrangement with Nam Thuan for leases; iv. Impact of the 2019 disclaimer of opinion
and also emphasis of matter on the material uncertainties on going concern of VII Group. Details of their auditors’ qualifications are set out in the their half yearly report which was issued on 17 May 2021.
In the absence of an observable market price and the continual uncertainties in the global economy coupled with the continual suspension of the shares to-date, management had retained the investment at 50% discount from its last traded price due to the uncertainties surrounding the shares suspension and the abovementioned auditors’ qualifications to their half yearly report. These assumption and input are unobservable and hence, the fair value is categorised as Level 3. OVERVIEW CORPORATE GOVERNANCE 136 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
9. OTHER INVESTMENT (CONT’D)
Sensitivity analysis
A 5% decrease/increase in the discount of 50% at the reporting date would have increased/(decreased) the other investment by the amounts shown below. This analysis assumes all variables remained constant and ignores any impact of forecasted transactions.
Additional discount 5% Increase Decrease RM’000 RM’000
Profit before tax (decrease)/increase (637) 637
10. DEFERRED TAX ASSETS/(LIABILITIES)
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net 2021 2020 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group Trade and other payables 4,351 1,374 - - 4,351 1,374 Property, plant and equipment - - (4,476) (3,198) (4,476) (3,198) Inventory 11,392 9,944 (24,806) (24,254) (13,414) (14,310) Other items 1,269 1,043 (69) (249) 1,200 794 Tax assets/(liabilities) 17,012 12,361 (29,351) (27,701) (12,339) (15,340) Set off of tax (5,162) (2,191) 5,162 2,191 - - Net tax assets/(liabilities) 11,850 10,170 (24,189) (25,510) (12,339) (15,340) OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 137 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
10. DEFERRED TAX ASSETS/(LIABILITIES) (CONT’D)
Movement in temporary differences during the year
At Recognised At Recognised At 1 April in profit or 31 March in profit or 31 March 2019 loss 2020 loss 2021 RM’000 RM’000 RM’000 RM’000 RM’000
Group Trade and other payables 132 1,242 1,374 2,977 4,351 Property, plant and equipment (667) (2,531) (3,198) (1,278) (4,476) Inventory (14,349) 39 (14,310) 896 (13,414) Other items (395) 1,189 794 406 1,200 Net tax (liabilities)/assets (15,279) (61) (15,340) 3,001 12,339
Company Property, plant and equipment - - - (5) (5)
Unrecognised deferred tax assets
The following unutilised tax losses, unabsorbed capital allowances and deductible temporary differences of the Group are available for offsetting against future taxable profits of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act 1967 and subject to agreement with the tax authority:
Group 2021 2020 RM’000 RM’000
Expiration period Expiry within 4 years 7,630 - Expiry within 5 years 2,364 9,808 Expiry within 6 years 1,285 3,256 Expiry within 7 years 1,279 2,230 Indefinite 24 244 12,582 15,538
Deferred tax assets of the Group have not been recognised in respect of these items because it is not probable that the subsidiaries will be able to generate sufficient taxable profits to utilise them.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon future events that are inherently uncertain. Judgement is also required about application of income tax legislation. Accordingly, the deferred tax assets recognised may be adjusted in subsequent periods as a result of changes in the accounting estimates. OVERVIEW CORPORATE GOVERNANCE 138 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
11. TRADE AND OTHER RECEIVABLES
Group Company 2021 2020 2021 2020 Note RM’000 RM’000 RM’000 RM’000
Trade receivables Third parties 19,287 10,813 - - Less: Allowance for impairment (179) (171) - - 19,108 10,642 - - Other receivables Amounts due from related parties: - Subsidiaries 11.1 - - 16,986 39,118 - Associates 11.1 1,145 1,145 1,119 1,119 1,145 1,145 18,105 40,237 Less: Allowance for impairment (1,145) (1,145) (16,918) (39,896) - - 1,187 341
Sundry deposits 4,324 3,754 112 112 Sundry receivables 11.2 10,825 18,863 2 10 15,149 22,617 114 122 Less: Allowance for impairment (701) (788) - - 14,448 21,829 114 122 14,448 21,829 1,301 463 Total trade and other receivables 33,556 32,471 1,301 463
11.1 Amounts due from subsidiaries and associates are unsecured, non-interest bearing and repayable on demand.
11.2 Included in sundry receivables is an advance payment of RM9,000,000 (2020: RM15,000,000) being the outstanding balance of advance payment made to a contractor in previous year. The said amount will be progressively settled over the duration of the contract.
12. CONTRACT ASSETS/(CONTRACT LIABILITIES)
Group Note 2021 2020 RM’000 RM’000
Contract assets Contract assets from property development 12.1 26,866 61,475 Other contract assets 12.2 17,694 21,040 44,560 82,515 Contract liabilities Other contract liabilities 12.3 (8,031) (5,349) (8,031) (5,349) OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 139 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
12. CONTRACT ASSETS/(CONTRACT LIABILITIES) (CONT’D)
12.1 Contract assets from property development
The Group issues progress billings to purchasers when the billing milestones are attained but recognises revenue by comparing the relevant costs incurred with the budgeted costs to completion. Consequently, there are timing differences between recognition of revenue and progress billings. The differences are presented as contract assets or liabilities accordingly.
The Group’s contract assets relating to the sale of properties as of each reporting period can be summarised as follows:
Group 2021 2020 RM’000 RM’000
At 1 April 61,475 58,140 Net revenue recognised during the year 89,893 103,883 Net progress billings during the year (124,502) (100,548) At 31 March 26,866 61,475
12.2 Other contract assets
Included in other contract assets are amount held by solicitors as stakeholder sums and will be released in accordance to schedule of payment as stated in sales and purchase agreement.
Reconciliation of movement of stakeholder sums:
Group 2021 2020 RM’000 RM’000
At 1 April 21,040 - Recognised during the year 17,380 21,040 Received during the year (20,726) - At 31 March 17,694 21,040
12.3 Other contract liabilities
Group 2021 2020 RM’000 RM’000
At 1 April (5,349) (4,486) Revenue recognised during the year 22,429 19,395 Total billings during the year (25,111) (20,258) At 31 March (8,031) (5,349)
Other contract liabilities were recognised for the education fees where invoices were issued in advance and revenue is recognised over time. OVERVIEW CORPORATE GOVERNANCE 140 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
13. CONTRACT COSTS
Group Note 2021 2020 RM’000 RM’000
Costs to fulfil contracts with customers 13.1 425 4,424 Costs to obtain contracts with customers 13.2 2,111 2,720 2,536 7,144
13.1 The land costs and certain development costs attributed to the sold units are capitalised as contract costs during the financial year. Generally, development costs are expensed to profit or loss. Certain land and related development costs which are incurred upfront and do not reflect the progress of work are expensed to the profit or loss following the progress of revenue recognition.
13.2 The sales commission fees that are attribute to the sold units are capitalised as contract costs during the financial year and amortised to the profit or loss following the progress of revenue recognition.
13.3 During the year, the contract fulfillment costs recognised as expenses in profit or loss was RM54,423,000 (2020: RM73,406,000).
14. DEPOSIT, CASH AND BANK BALANCES
Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Cash on hand and at banks 14.1 92,293 83,481 3,763 3,611 Deposits with financial institutions 14.2 30,092 26,588 83 3,269 122,385 110,069 3,846 6,880
14.1 Included in cash at banks of the Group were amounts of RM16,736,000 (2020: RM11,595,000) held under the Housing Development Accounts (“HDA Account”) pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966 (Act 118) and are therefore restricted from use in other operations.
14.2 Included in deposits with financial institutions of the Group and the Company were amounts of RM23,377,000 and RM83,000 respectively (2020: RM14,140,000 and RM81,000 respectively) pledged to banks as securities deposits for bank guarantees. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 141 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
14. DEPOSIT, CASH AND BANK BALANCES (CONT’D)
For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as at the reporting date:
Group Company Note 2021 2020 2021 2020
RM’000 RM’000 RM’000 RM’000
Deposits, cash and bank balances 122,385 110,069 3,846 6,880 Less: - Deposits pledged as security for bank guarantee facility (23,377) (14,140) (83) (81)
- Deposits with period more than 3 months (6,903) (2,309) - -
92,105 93,620 3,763 6,799
Bank overdraft 18 (4,499) (2,893) - -
Total cash and cash equivalents 87,606 90,727 3,763 6,799
15. SHARE CAPITAL
Group and Company Number of Number of shares Amount shares Amount 2021 2020 2021 2020
’000 RM’000 ’000 RM’000
Issued and fully paid shares with no par value classified as equity instruments:
Ordinary share 2,973,135 660,232 2,973,135 660,232
The holders of ordinary share are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All the ordinary shares rank equally with regards to the Company’s residual assets. OVERVIEW CORPORATE GOVERNANCE 142 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
16. PROVISIONS
Provision Provision for costs to for financial Other complete obligation provision Total RM’000 RM’000 RM’000 RM’000
Group At 1 April 2019 16,441 20,806 4,692 41,939 Additions 1,817 - 549 2,366 Utilisation (1,521) - (2,550) (4,071) Write back of provision (7,400) (6,242) (407) (14,049) At 31 March 2020/1 April 2020 9,337 14,564 2,284 26,185 Additions 26,290 - 188 26,478 Utilisation (1,222) - (7) (1,229) Write back of provision (2,872) (6,242) - (9,114) At 31 March 2021 31,533 8,322 2,465 42,320
Presented in statement of financial position 2021 Non-current 3,642 - - 3,642 Current 27,891 8,322 2,465 38,678 31,533 8,322 2,465 42,320 2020 Current 9,337 14,564 2,284 26,185
Company Current At 1 April 2019 - 20,806 1,700 22,506 Additions - - 549 549 Write back of provision - (6,242) - (6,242) At 31 March 2020/1 April 2020 - 14,564 2,249 16,813 Additions - - 188 188 Write back of provision - (6,242) - (6,242) At 31 March 2021 - 8,322 2,437 10,759
Provision for costs to complete
Provision for costs to complete relates to present obligations imposed by authorities on subsidiaries property development projects. The obligations comprise the constructions of infrastructure and community buildings for the projects. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 143 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
16. PROVISIONS (CONT’D)
Provision for financial obligation
This is the estimated financial liability, as assessed by the directors, arising from the liquidation of a subsidiary in the previous financial years. As of to-date, the counter party has not made a claim against the Group or the Company. The provision is based on the probability-weighted outcomes of amount owing by the former subsidiary to the financial institutions after due consultation with solicitors. The directors are of the view that further disclosures of information may prejudice the position of the Group or the Company.
17. TRADE AND OTHER PAYABLES
Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Non-current
Other payables Sundry payables 167 154 - -
Current
Trade payables Third parties 17.1 45,177 33,674 - - Retention sum payables 25,391 25,031 - - Accruals for construction costs 5,948 27,024 - - 76,516 85,729 - - Other payables Amount due to subsidiaries 17.2 - - 13,996 18,848 Sundry payables 16,914 13,123 1,067 1,143 Accruals 15,736 13,667 685 122 Contingent consideration 17.3 22,612 20,191 22,612 20,191 55,262 46,981 38,360 40,304 131,778 132,710 38,360 40,304 131,945 132,864 38,360 40,304
17.1 Trade payables
Trade payables are non-interest bearing and the normal trade credit term granted to the Group is 30 days (2020: 30 days).
17.2 Amount due to subsidiaries
Amounts due to subsidiaries are unsecured, non-interest bearing and repayable upon demand. OVERVIEW CORPORATE GOVERNANCE 144 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
17. TRADE AND OTHER PAYABLES (CONT’D)
17.3 Contingent consideration
A contingent consideration of RM14,620,000 was determined at the date of acquisition of CGPM and has been recognised as investment in associate with the corresponding liability of the same amount in the statement of financial position. The liability as at year end includes fair value changes for the year of RM2,421,000 (2020: RM2,161,000). The nominal value of the contingent consideration is RM38,722,000.
The liability is payable when CGPM pays dividend or other distributions to its shareholders. The compensation was discounted based on discount rate of 12% and over 10 years being the project period as it is expected that CGPM will pay dividend or other distributions to its shareholders after the projects are completed.
Sensitivity analysis
A 2 years decrease/increase in the projected period at the reporting date would have increased/(decreased) the liability by the amounts shown below. This analysis assumes all variables remained constant and ignores any impact of forecasted transactions.
2021 2020 Projected period 2 years Projected period 2 years Increase Decrease Increase Decrease RM’000 RM’000 RM’000 RM’000
Profit before tax increase/(decrease) 5,253 (4,703) 4,692 (4,198)
18. BORROWINGS
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Non-current Bridging loan 47,842 45,000 - - Term loan 150,445 138,266 - - Other borrowings 137 230 102 180 198,424 183,496 102 180 Current Bank overdraft 4,499 2,893 - - Bridging loan 3,216 - - - Term loan 7,300 19,430 - - Revolving credit 10,503 - - - Other borrowings 92 129 78 75 25,610 22,452 78 75 Total borrowings 224,034 205,948 180 255 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 145 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
18. BORROWINGS (CONT’D)
(a) The following facilities were granted to a subsidiary to partially finance the purchase and development of leasehold land situated in Ampang and also for working capital requirement of the property development:
2021 2020 RM’000 RM’000
Term loans 41,663 45,382 Bridging loan 51,058 45,000 Bank overdraft 4,499 2,893 97,220 93,275
The said facilities are secured by:
- a first legal charge over the said property and commercial leasehold land; and - a specific debenture over the property and the development project together with fixed and floating assets, intellectual properties, goodwill, revenues, undertakings and all other rights relating to the Astoria project.
The said facilities bore interests ranging from 3.97% to 4.72% per annum (2020: 4.72% to 6.22% per annum).
(b) The following facilities were granted to a subsidiary to partially finance the preliminaries earthwork and common infrastructure costs for residential development in Seremban.
2021 2020 RM’000 RM’000
Term loan - 807 Revolving credit 5,000 - 5,000 807
The said facilities are secured by a first legal charge over the development land. The said facilities bore interests at 3.50% per annum (2020: 5.14% per annum).
(c) Term loan of RM96,958,000 (2020: RM95,520,000) to partially finance the purchase of leasehold commercial land situated in Seri Kembangan. The said loan is secured by:
- a first legal charge over the said commercial leasehold land; and - a specific debenture over development land and project together with fixed and floating assets, intellectual properties, goodwill, revenues, undertakings and all other rights relating to the project.
The said loan bore interests at 3.97% per annum (2020: 4.72% per annum). OVERVIEW CORPORATE GOVERNANCE 146 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
18. BORROWINGS (CONT’D)
(d) Term loan of RM19,124,000 (2020: RM15,987,000) to partially finance the construction of the international school building. The said loan is secured by:
- one parcel of leasehold land erected with Sri Bestari School; and - a specific debenture over the property together with present and future fixtures and fittings, goodwill, intellectual properties, revenues, undertakings, and all other rights relating to the property.
The said loan bore interests at 3.47% per annum (2020: 4.22% per annum).
(e) Revolving credit of RM5,503,000 (2020: NIL) to finance the development of Seresta Project. The said loan is secured by:
- a first legal charge over the said project land; and - a first floating charge over all the present and future assets pertaining to the project.
The said facilities bore interests at 3.75% per annum (2020: NIL).
Reconciliation of movements of liabilities to cash flows arising from financing activities
Bridging Term Revolving Group loan loan credit Others Total RM’000 RM’000 RM’000 RM’000 RM’000
At 1 April 2019 25,916 160,476 3,729 404 190,525 Net changes from financing activities 17,042 (11,447) (3,753) (138) 1,704 Interest expenses during the year 2,042 8,667 24 19 10,752 Other changes - - - 74 74 At 31 March 2020/ 1 April 2020 45,000 157,696 - 359 203,055 Net changes from financing activities 4,055 (6,387) 10,443 (132) 7,979 Interest expenses during the year 2,003 6,436 60 14 8,513 Other changes - - - (12) (12) At 31 March 2021 51,058 157,745 10,503 229 219,535 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 147 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
19. REVENUE
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Revenue from contracts with customers Sales of properties under development 89,893 103,883 - - Sales of completed properties 15,170 8,765 - - Management fee 235 230 2,479 2,048 Education fees 22,429 18,825 - - Others 3,806 2,964 - - 131,533 134,667 2,479 2,048 Other revenue Dividend income from subsidiary - - 13,189 51,391 Other finance income 195 623 148 474 Leasing income 3,164 4,434 3,207 3,156 3,359 5,057 16,544 55,021 Total revenue 134,892 139,724 19,023 57,069 Timing and recognition of revenue from contract with customers At a point in time 18,976 11,729 - - Over time 112,557 122,938 2,479 2,048
19.1 The following shows the revenue expected to be recognised in the future related to the performance obligations that are yet to be satisfied by the Group at the reporting date. The amounts presented below are after accounting for all the variable considerations from contracts with customers.
Within 1 to 3 years 2021 2020
RM’000 RM’000
Remaining performance obligation for the financial year end
Property development revenue 61,683 78,843
19.2 The Group and the Company apply the following practical expedients:
• exemption on disclosure of information on remaining performance obligations that have original expected durations of one year or less. • exemption not to adjust the promised amount of consideration for the effects of a significant financing component when the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service is one year or less. OVERVIEW CORPORATE GOVERNANCE 148 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
19. REVENUE (CONT’D)
Revenue arising from sale of properties is arising from sale of residential properties and land in Malaysia. For sale of incomplete units, revenue is recognised over time, which is determined by the proportion that relevant property development costs incurred for work performed to date compared to the relevant estimated total property development costs.
For sale of completed unit and land, revenue is recognised at a point in time, which normally is upon the delivery of vacant possession or upon the Group allowing the customer to raise financing using the property.
Significant judgement is required in determining the revenue to be recognised over time, which is highly dependent on the estimated total property development costs. In making the judgement, the Group evaluates the estimates based upon past experience and by relying on the work of architects and quantitative surveyors.
Revenue arising from education fees is recognised over time throughout the academic period.
20. OTHER INCOME
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Dividend from short-term funds 1,012 2,883 - - Gain on disposal of property, plant and equipment 16 - 13 - Interest income 1,025 3,101 - - Reversal of allowance for impairment on investment in jointly controlled entity 12,770 - - - Write back of provision for - costs to complete 2,872 7,400 - - - financial obligation 6,242 6,242 6,242 6,242 - others - 407 - - Other income 572 3,064 1 6 24,509 23,097 6,256 6,248
21. STAFF COSTS
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Wages, salaries and bonus 22,791 18,739 3,511 2,390 Defined contribution plan 2,905 2,197 444 293 Other employment benefits 1,133 1,791 330 668 26,829 22,727 4,285 3,351 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 149 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
21. STAFF COSTS (CONT’D)
Included in staff costs of the Group and of the Company are remunerations (excluding benefits-in-kind) of executive director of the Group and of the Company amounting to RM1,133,000 (2020: RM971,000) as further disclosed below:
Group and Company 2021 2020 RM’000 RM’000
Executive director’s remuneration Other emoluments 1,133 971 Non-executive directors’ remuneration Fees 504 490 Other emoluments ^ 223 214 727 704 Total directors’ remuneration 1,860 1,675 Estimated money value of benefits-in-kind 34 37 Total directors’ remuneration including benefits-in-kind 1,894 1,712
^ Included in other emoluments are advisory fee of RM126,000 (2020: RM122,000) paid for the advisory role undertaken by a non-executive director.
22. PROFIT BEFORE TAX
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Profit before tax is arrived at after charging: Auditors’ remuneration: Audit fees - KPMG PLT 291 290 70 70 - Other auditors - 5 - - Non-audit fees - KPMG PLT 10 20 10 20 Fair value loss on other investment 1,160 3,941 1,160 3,941 Interest expenses on: - Borrowings 8,578 10,807 9 13 - Contingent consideration 2,421 2,161 2,421 2,161 - Lease liabilities 34 63 - - 11,033 13,031 2,430 2,174 Less interest expenses capitalised into qualifying assets: - Property, plant and equipment - (425) - - - Inventories (8,597) (9,986) - - Finance costs 2,436 2,620 2,430 2,174 OVERVIEW CORPORATE GOVERNANCE 150 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
23. TAX EXPENSE
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Current tax: Current year 7,984 5,714 660 838 Under/(Over) provision in prior years 150 (223) (231) 22 8,134 5,491 429 860 Deferred tax: (Reversal)/Origination of temporary differences (955) 596 - - (Over)/Under provision in prior years (2,046) (535) 5 - (3,001) 61 5 - 5,133 5,552 434 860 Reconciliation of tax expense Taxation at Malaysian statutory tax rate of 24% 9,183 6,284 3,758 12,222 Effect of tax rates in foreign jurisdictions 839 - - - Income not subject to tax (4,568) (2,137) (4,672) (12,864) Non-deductible expenses 1,245 1,696 1,574 1,480 Deferred tax assets not recognised in respect of current year’s tax losses and unabsorbed capital allowances 330 467 - - (Over)/Under provision of deferred tax in prior year (2,046) (535) 5 - Under/(Over) provision of tax expense in prior years 150 (223) (231) 22 5,133 5,552 434 860
24. EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share for the year ended 31 March 2021 was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
Group 2021 2020
Profit for the year attributable to owners of the Company (RM‘000) 30,459 14,891 Weighted average number of ordinary shares in issue (‘000) 2,973,135 2,973,135 Basic earnings per share (sen) 1.02 0.50
Diluted earnings per ordinary share
No diluted earnings per share is disclosed in the financial statements as there are no dilutive potential ordinary shares. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 151 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
25. DIVIDENDS
Dividends recognised by the Company:
Sen per Total Share amount Date of payment RM’000
2020 Final 2019 ordinary 1.0 29,731 23 October 2019
There was no dividend paid in respect of the financial year ended 31 March 2021.
After the end of the reporting period, the following dividend was proposed by the Directors. This dividend will be recognised in the subsequent financial period upon approval by the owners of the shareholders.
Sen per Total Share amount RM’000
Final 2021 ordinary 0.5 14,866
26. OPERATING SEGMENTS
The Group has three reportable segments based on its products and services. The Managing Director together with the Board of Directors are collectively the chief operating decision maker (“CODM”). CODM assesses the performance of these segments regularly based on internal management reports. The operations in each of the reportable segment are as follows:
(i) Property development: development of residential and commercial properties (ii) Education: operation of co-education schooling from kindergarten to secondary education (iii) Other segment: land cultivation and investment in commercial properties
Non-reportable segment refers to investment holding and dormant operations.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss for the financial year, in certain respects as set out below, is measured differently from operating profit or loss in the consolidated financial statements.
With the exception of its property development in Australia via its joint venture, Hidden Valley Australia Pty Ltd, the Group’s entire active business operations is located in Malaysia. OVERVIEW CORPORATE GOVERNANCE 152 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
26. OPERATING SEGMENTS (CONT’D)
Non- Adjustments Consolidated Property Other reportable and financial Note development Education segment segment eliminations statements RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2021 Revenue Sales to external customers 107,906 22,484 3,973 334 - 134,697 Interest income, dividend from short- term funds and quoted investment - - - 195 - 195 Inter-segment sales A 110 - 28 5,587 (5,725) - Total revenue 108,016 22,484 4,001 6,116 (5,725) 134,892
Results Operating profit/(loss) B 24,212 5,717 (1,735) 11,488 (1,419) 38,263 Interest income and dividend from short-term funds 1,863 109 65 - - 2,037 Depreciation and amortisation (3,798) (1,657) (1,629) (520) - (7,604) Write back of provisions 2,872 - - 6,242 - 9,114 Reversal of impairment of joint venture - - - 12,770 - 12,770
Assets Additions to non-current assets other than financial instruments and deferred tax asset C 9,937 684 326 3 - 10,950 Segment assets D 1,239,831 69,789 116,218 29,933 181,684 1,637,455
Liabilities Segment liabilities E 330,739 39,057 1,132 35,731 27,809 434,468 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 153 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
26. OPERATING SEGMENTS (CONT’D)
Non- Adjustments Consolidated Property Other reportable and financial Note development Education segment segment eliminations statements RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2020 Revenue Sales to external customers 116,007 19,426 3,390 278 - 139,101 Interest income, dividend from short- term funds and quoted investment - - - 623 - 623 Inter-segment sales A 140 - 40 5,172 (5,352) - Total revenue 116,147 19,426 3,430 6,073 (5,352) 139,724
Results Operating profit/(loss) B 24,576 6,254 (2,330) (2,325) 10 26,185 Interest income and dividend from short-term funds 5,656 133 173 22 - 5,984 Depreciation and amortisation (4,265) (955) (1,710) (522) - (7,452) Write back of provisions 7,400 - 407 6,242 - 14,049
Assets Additions to non-current assets other than financial instruments and deferred tax asset C 28,391 30,451 20 - - 58,862 Segment assets D 1,182,153 62,840 117,718 34,593 168,339 1,565,643
Liabilities Segment liabilities E 298,237 33,269 751 38,951 26,773 397,981 OVERVIEW CORPORATE GOVERNANCE 154 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
26. OPERATING SEGMENTS (CONT’D)
Notes: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements.
A Inter-segment revenues are eliminated on consolidation.
B The following items are added to operating profit to arrive at total profit before tax reported in the consolidated statement of comprehensive income:
2021 2020 RM’000 RM’000
Finance costs (2,436) (2,620) Share of results of an associate (1,951) 2,307 Share of results of joint ventures 2,968 323 (1,419) 10
C Additions to non-current assets other than financial instruments and deferred tax asset consist of:
2021 2020 RM’000 RM’000
Property, plant and equipment 1,039 30,997 Land held for property development 8,005 27,865 Investment property 1,906 - 10,950 58,862
D The following items are added to segment assets to arrive at total assets reported in the consolidated statement of financial position:
2021 2020 RM’000 RM’000
Investment in joint ventures 17,430 323 Investment in associates 151,924 153,875 Deferred tax assets 11,850 10,170 Tax recoverable 480 3,971 181,684 168,339
E The following items are added to segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:
2021 2020 RM’000 RM’000
Deferred tax liabilities 24,189 25,510 Tax payable 3,620 1,263 27,809 26,773 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 155 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
26. OPERATING SEGMENTS (CONT’D)
Geographical information
Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:
Revenue Non-current assets 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Malaysia 134,609 139,345 938,784 939,550 Australia 278 280 12,512 323 Others 5 99 - - 134,892 139,724 951,296 939,873
27. FINANCIAL INSTRUMENTS
27.1 Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Amortised cost (“AC”); and (b) Fair value through profit or loss (“FVTPL”)
Carrying amount AC FVTPL RM’000 RM’000 RM’000
2021
Financial assets Group Trade and other receivables 33,556 33,556 - Other investment 6,367 - 6,367 Short-term funds 2,910 - 2,910 Deposits, cash and bank balances 122,385 122,385 - 165,218 155,941 9,277
Company Trade and other receivables 1,301 1,301 - Other investment 6,367 - 6,367 Short-term funds 3 - 3 Deposits, cash and bank balances 3,846 3,846 - 11,517 5,147 6,370 OVERVIEW CORPORATE GOVERNANCE 156 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.1 Categories of financial instruments (Cont’d)
Carrying amount AC FVTPL RM’000 RM’000 RM’000
2020
Financial assets Group Trade and other receivables 32,471 32,471 - Other investment 7,527 - 7,527 Short-term funds 3,185 - 3,185 Deposits, cash and bank balances 110,069 110,069 - 153,252 142,540 10,712
Company Trade and other receivables 463 463 - Other investment 7,527 - 7,527 Short-term funds 59 - 59 Deposits, cash and bank balances 6,880 6,880 - 14,929 7,343 7,586
2021
Financial liabilities Group Borrowings 224,034 224,034 - Trade and other payables 131,945 109,333 22,612 355,979 333,367 22,612
Company Borrowings 180 180 - Trade and other payables 38,360 15,748 22,612 38,540 15,928 22,612
2020
Financial liabilities Group Borrowings 205,948 205,948 - Trade and other payables 132,864 112,673 20,191 338,812 318,621 20,191
Company Borrowings 255 255 - Trade and other payables 40,304 20,113 20,191 40,559 20,368 20,191 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 157 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.2 Net gains and losses arising from financial instruments
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Net losses arising on: Financial assets measured at amortised cost 1,252 2,937 718 (428) Financial assets measured at fair value through profit or loss (111) (744) (1,123) (3,627) Financial liabilities measured at amortised cost (8,612) (10,231) (9) (12) Financial liabilities measured at fair value through profit or loss (2,421) (2,161) (2,421) (2,161) (9,892) (10,199) (2,835) (6,228)
27.3 Financial risk management
The Group and the Company have exposure to the following risks from its use of financial instruments:
• Credit risk • Liquidity risk • Market risk
27.4 Credit risk
Credit risk is the risk of a financial loss to the Group or the Company if a counterparty to a financial instrument fails to meet its contractual obligation. The Group’s and the Company’s exposure to credit risk arises principally from receivables, contract assets, other investments and deposits, cash and bank balances. There are no significant changes as compared to prior years.
Trade receivables and contract assets
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
At each reporting date, the Group or the Company assesses whether any of the trade receivables and contract assets are credit impaired.
The gross carrying amounts of credit impaired trade receivables and contract assets are written off (either partially or full) when there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write off. Nevertheless, trade receivables and contract assets that are written off could still be subject to enforcement activities. OVERVIEW CORPORATE GOVERNANCE 158 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.4 Credit risk (Cont’d)
Trade receivables and contract assets (Cont’d)
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statement of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at their realisable values. The Group and the Company use ageing analysis to monitor the credit quality of the receivables.
Recognition and measurement of impairment losses
The Group assessed the risk of loss of each customer individually based on their financial information, past trend of payments and external credit ratings, where applicable. Generally, these customers have low risk of default because they are normally collateralised with security deposits or titles of properties.
The following table provides information about the exposure to credit risk and Expected Credit Losses (“ECLs”) for trade receivables and contract assets as at 31 March 2021 which are grouped together as they are expected to have similar risk nature.
Gross carrying Loss Net amount allowance balance
Group RM’000 RM’000 RM’000
2021 Current (not past due) 51,826 - 51,826 31 – 60 days past due 3,536 - 3,536 61 – 90 days past due 2,562 - 2,562 91 – 120 days past due 5,438 - 5,438 More than 120 days past due 485 (179) 306
63,847 (179) 63,668
2020 Current (not past due) 85,261 - 85,261 31 – 60 days past due 2,141 - 2,141 61 – 90 days past due 1,403 - 1,403 91 – 120 days past due 4,100 - 4,100 More than 120 days past due 423 (171) 252 93,328 (171) 93,157
OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 159 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.4 Credit risk (Cont’d)
Movements on the Group’s loss allowances for trade receivables and contract assets are as follows:
2021 2020 RM’000 RM’000
Group At 1 April 171 261 Impairment loss recognised 8 5 Impairment loss reversed - (95) At 31 March 179 171
Short-term funds and cash and cash equivalents
The short-term funds and cash and cash equivalents are held with banks and financial institutions. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.
These banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by government agencies. Consequently, the Group and the Company are of the view that the loss allowance is not material and hence, it is not provided for.
Other receivables
Risk management objectives, policies and processes for managing the risk
Credit risks on other receivables are mainly arising from non-trade amounts due from related parties, non-trade deposits and sundry receivables.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position. OVERVIEW CORPORATE GOVERNANCE 160 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.4 Credit risk (Cont’d)
Other receivables (Cont’d)
Recognition and measurement of impairment loss
As at the end of the reporting period, the Group recognised the allowance for impairment losses as below:
Gross carrying Loss Net amount allowance balance
Group RM’000 RM’000 RM’000
2021 Amount due from associates 1,145 (1,145) - Deposits and sundry receivables 15,149 (701) 14,448
16,294 (1,846) 14,448
2020 Amount due from associates 1,145 (1,145) - Deposits and sundry receivables 22,617 (788) 21,829
23,762 (1,933) 21,829
Movements on the Group’s loss allowances for other receivables are as follows:
2021 2020 RM’000 RM’000
Group At 1 April 1,933 3,869 Impairment loss reversed (13) (1,906) Foreign exchange gain (74) (30) At 31 March 1,846 1,933
27.5 Liquidity risk
Liquidity risk is the risk that the Group and the Company will not be able to meet its financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk arises principally from payables, borrowings and corporate guarantees provided to banks.
The Group or the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 161 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.5 Liquidity risk (Cont’d)
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:
More Carrying Contractual Contractual Under 1-2 2-5 than 5 Note amount interest rates cash flows 1 year years years years 2021 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group Borrowings 224,034 2.39% to 5.47% 252,372 28,597 38,148 91,591 94,036 Lease liabilities 329 5.47% 336 336 - - - Trade and other payables (excluding the contingent consideration) 109,333 - 109,333 109,166 167 - - Contingent consideration 22,612 12.00% 38,722 38,722 - - - Corporate guarantees (i) - - 26,357 26,357 - - - 356,308 427,120 203,178 38,315 91,591 94,036 Company Borrowings 180 4.22% 189 84 84 21 - Trade and other payables (excluding the contingent consideration) 15,748 - 15,748 15,748 - - - Contingent consideration 22,612 12.00% 38,722 38,722 - - - Corporate guarantees (i) - - 172,954 172,954 - - - 38,540 227,613 227,508 84 21 -
OVERVIEW CORPORATE GOVERNANCE 162 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.5 Liquidity risk (Cont’d)
More Carrying Contractual Contractual Under 1-2 2-5 than 5 Note amount interest rates cash flows 1 year years years years 2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group Borrowings 205,948 2.39% to 6.22% 249,713 32,496 40,541 75,376 101,300 Lease liabilities 862 5.47% 904 568 336 - - Trade and other payables (excluding the contingent consideration) 112,673 - 112,673 112,519 154 - - Contingent consideration 20,191 12.00% 38,722 38,722 - - - Corporate guarantees (i) - - 40,758 40,758 - - - 339,674 442,770 225,063 41,031 75,376 101,300
Company Borrowings 255 4.22% 273 84 84 105 - Trade and other payables (excluding the contingent consideration) 20,113 - 20,113 20,113 - - - Contingent consideration 20,191 12.00% 38,722 38,722 - - - Corporate guarantees (i) - 158,962 158,962 - - - 40,559 218,070 217,881 84 105 -
(i) The corporate guarantee provided by the Group and the Company to financial institutions for loan facilities granted to an associate and subsidiaries amounted to RM26,357,000 and RM172,655,000 respectively (2020: RM40,758,000 and RM158,962,000 respectively) representing the maximum exposure to credit risk of the Group and the Company respectively if the corporate guarantee is called on.
27.6 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect the Group’s financial position or cash flows. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 163 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.6 Market risk
27.6.1 Interest rate risk
The Group’s investments in fixed rate deposits are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short-term receivables and payables are not significantly exposed to interest rate risk.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest earning and interest- bearing financial instruments, based on carrying amounts as at the end of the reporting period was:
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Fixed rate instruments Financial assets 30,092 26,588 83 3,269 Financial liabilities (229) (359) (180) (255) Contingent consideration (22,612) (20,191) (22,612) (20,191) Lease liabilities (329) (862) - - 6,922 5,176 (22,709) (17,177) Floating rate instruments Financial assets 2,910 3,185 3 59 Financial liabilities (223,805) (205,589) - - (220,895) (202,404) 3 59
Fair value sensitivity analysis for fixed rate instruments
The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.
OVERVIEW CORPORATE GOVERNANCE 164 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.6 Market risk (Cont’d)
27.6.1 Interest rate risk (Cont’d)
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (“bps”) in interest rates at the end of the reporting period would have increased/(decreased) equity and post-tax profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Profit or loss 100 bps 100 bps Increase Decrease RM’000 RM’000 Group 2021 Floating rate instruments (1,679) 1,679 2020 Floating rate instruments (1,538) 1,538
The Company’s exposure to interest rate risk is not material and hence, sensitivity analysis is not presented.
27.6.2 Equity price risk
The Group is exposed to equity price risks arising from quoted equity instruments. The Group does not actively trade these investments. To manage its equity price risks arising from these investments, the Group closely monitors the effects of fluctuation in equity prices.
Sensitivity analysis for equity price risk
At the end of the reporting period, if the prices of quoted shares had been 5% higher/lower, with all other variables hold constant, the Group’s profit for the year would have been RM377,000 (2020: RM573,000) higher/lower, arising as a result of higher/lower fair value gains on financial assets designated at fair value through profit or loss. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 165 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS 3 (180) 6,367 2,910 9,277 6,367 6,370 (22,612) (22,612) (22,792) RM’000 amount (224,034) (246,646) Carrying 3 (180) 6,367 2,910 9,277 6,367 6,370 value (22,612) (22,612) (22,792) RM’000 (224,034) (246,646) Total fair Total ------(180) (180) Total RM’000 (224,034) (224,034) ------(180) (180) Level 3 Level RM’000 (224,034) (224,034) ------Level 2 Level RM’000 not carried at fair value at fair not carried ------Fair value of financial instruments of financial instruments value Fair Level 1 Level RM’000 - - 3 Total 6,367 2,910 9,277 6,367 6,370 (22,612) (22,612) (22,612) (22,612) RM’000 - - - - 6,367 6,367 6,367 6,367 Level 3 Level (22,612) (22,612) (22,612) (22,612) RM’000 ------3 3 2,910 2,910 Level 2 Level RM’000 carried at fair value at fair carried ------Fair value of financial instruments of financial instruments value Fair Level 1 Level RM’000 Fair value information value Fair their fair approximate reasonably and payables receivables short-term equivalents, and cash of cash amounts The carrying of other value the fair analyses below The table of these financial instruments. nature short-term the relatively due to value financial instruments: 2021 Group Financial assets Other investment Short-term funds Short-term Financial liabilities Borrowings Contingent consideration Company Financial assets Other investment Short-term funds Short-term Financial liabilities Borrowings Contingent consideration FINANCIAL (CONT’D) FINANCIAL INSTRUMENTS 27.7 27. 27. OVERVIEW CORPORATE GOVERNANCE 166 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS 59 (255) 7,527 3,185 7,527 7,586 10,712 (20,191) (20,191) (20,446) RM’000 amount (205,948) (226,139) Carrying 59 (255) 7,527 3,185 7,527 7,586 value 10,712 (20,191) (20,191) (20,446) RM’000 (205,948) (226,139) Total fair Total ------(255) (255) Total RM’000 (205,948) (205,948) ------(255) (255) Level 3 Level RM’000 (205,948) (205,948) ------Level 2 Level RM’000 not carried at fair value at fair not carried ------Fair value of financial instruments of financial instruments value Fair Level 1 Level RM’000 - - 59 Total 7,527 3,185 7,527 7,586 10,712 (20,191) (20,191) (20,191) (20,191) RM’000 - - - - 7,527 7,527 7,527 7,527 (20,191) (20,191) (20,191) (20,191) Level 3 Level RM’000 ------59 59 3,185 3,185 Level 2 Level RM’000 carried at fair value at fair carried ------Fair value of financial instruments of financial instruments value Fair Level 1 Level RM’000 Fair value information (Cont’d) information value Fair 2020 Group Financial assets Other investment Short-term funds Short-term Financial liabilities Borrowings Contingent consideration Company Financial assets Other investment Short-term funds Short-term Financial liabilities Borrowings Contingent consideration FINANCIAL (CONT’D) FINANCIAL INSTRUMENTS 27.7 27. 27. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 167 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
27. FINANCIAL INSTRUMENTS (CONT’D)
27.7 Fair value information (Cont’d)
Level 2 fair value
Short-term funds
Fair value is determined directly by reference to their Net Assets Value (“NAV”) stated in the monthly statement at the reporting date.
Level 3 fair value
Borrowings
Discounted cash flows using a rate based on the current market rate of borrowing of the Group and the Company at the reporting date is used as a valuation technique in the determination of fair values of term loans.
Contingent consideration
Discounted cash flows using a rate based on the industry risk rate of the associate at the reporting date is used as a valuation technique in the determination of fair values of contingent consideration. The significant assumptions are included in Note 17.3.
Other investment
The valuation method and the significant judgement and assumptions are disclosed in Note 9.
28. CAPITAL MANAGEMENT
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investors, creditors and market confidence and to sustain the future development of the business. The principal form of capital is share capital and when necessary, borrowings as included in the statements of financial position.
There was no change in the Group’s approach to capital management during the year.
29. CAPITAL AND OTHER COMMITMENTS
2021 2020 RM’000 RM’000
Group Capital expenditure Approved and contracted for - Investment in jointly controlled entity 3,225 - - School building 2,652 - - Property, plant and equipment 320 - OVERVIEW CORPORATE GOVERNANCE 168 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
30. RELATED PARTIES
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly and entity that provides key management personnel services to the Group. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group.
The Group has related party relationship with its holding companies, significant investors, subsidiaries, associates and key management personnel.
Significant related party transactions
Related party transactions have been entered into in the normal course of business under negotiated terms. The significant related party transactions of the Group and the Company are shown below. The balances related to the below transactions are shown in Note 11 and 17.
2021 2020 RM’000 RM’000
Group Management fee received from joint venture 235 233
Company Rental income from subsidiaries 3,108 3,108 Management fee from subsidiaries 2,479 2,048 Rental expense paid to a subsidiary (110) (110) Dividend from subsidiaries 13,189 51,391
Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000
Management entity Key management personnel services fee Short-term employee benefits 5,536 5,109 2,138 1,900 Post-employment benefits: - Defined contribution plan 624 599 251 222 6,160 5,708 2,389 2,122
Included in the total compensation of key management personnel are executive directors’ remuneration and the estimated money value of benefits-in-kind as disclosed in Note 21. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 169 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTES TO THE FINANCIAL STATEMENTS
31. CONTINGENT LIABILITIES
On 11 March 2021, Sri Damansara Sdn. Bhd. (“SDSB”), a wholly-owned subsidiary of the Company received a Notice of Additional Assessment (Form JA) from Inland Revenue Board (“IRB”) in respect of Year of Assessment (“YA”) 2018, wherein a sum of RM6.69 million of additional taxes and penalties was sought by IRB in relation to sale of a piece of land in the previous year where IRB is of the view that the sale is subject to corporate tax instead of real property gain tax.
SDSB is of the view that the said additional taxes and penalties levied by IRB are open to challenge and has hence, engaged tax solicitors to assist in challenging the said disputed additional taxes and penalties imposed by IRB.
On 15 March 2021, SDSB filed an Application for Judicial Review to the High Court of Kuala Lumpur (“High Court”) in challenging the said notice of additional assessment and the Court had fixed the hearing for leave to commence judicial review on 21 April 2021. The hearing for leave to commence judicial review was adjourned to 10 June 2021. In the meantime, the Court had granted an interim stay upon the enforcement of the said Notice of Additional Assessment until 10 June 2021, whereby the additional taxes did not have to be paid until 10 June 2021. Due to the implementation of Full Movement Control Order, the hearing for leave has been further adjourned to 13 September 2021 and the Court granted an extension of stay until then, whereby the additional taxes do not have to be paid until 13 September 2021. OVERVIEW CORPORATE GOVERNANCE 170 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) STATEMENT BY DIRECTORS PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016
In the opinion of the Directors, the financial statements set out on pages 92 to 169 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2021 and of their financial performance and cash flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Low Gay Teck Ferdaus Bin Mahmood Director Director
Kuala Lumpur,
Date: 11 August 2021
STATUTORY DECLARATION PURSUANT TO SECTION 251(1)(B) OF THE COMPANIES ACT 2016
I, Chee Yuet Sin (CA 11452), the officer primarily responsible for the financial management of Land & General Berhad, do solemnly and sincerely declare that the financial statements set out on pages 92 to 169 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed Chee Yuet Sin, at Kuala Lumpur in the Federal Territory on 11 August 2021.
Chee Yuet Sin
Before me:
Pesuruhjaya Sumpah Malaysia Tan Seok Kett (W530) Lot 333, 3rd Floor, Wisma MPL Jalan Raja Chulan 50200 Kuala Lumpur OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 171 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LAND & GENERAL BERHAD (Registration No. 196401000184 (5507-H)) (Incorporated in Malaysia)
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Land & General Berhad, which comprise the statements of financial position as at 31 March 2021 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 92 to 169.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March 2021, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
Basis for Opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our auditors’ report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and Other Ethical Responsibilities
We are independent of the Group and of the Company in accordance with the By- Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters are as follows:
Revenue Recognition - Group Refer to Note 2(q) – Revenue and other income and Note 19 – Revenue The key audit matter How the matter was addressed in our audit The Group’s largest revenue stream relates to property We performed the following audit procedures, among development activities. Judgements were required to evaluate others: contracts with customers, in particular, on the number of performance obligations, allocation of transaction price to • selected samples of sale and purchase agreements each performance obligation and the determination of whether and obtained sufficient and appropriate evidence revenue for each contract is to be recognised over time or at a to support that they met the criteria to recognise point in time. revenue;
Property development revenue is recognised over time by • read agreements and other correspondences to reference to the proportion that relevant property development determine that distinct performance obligations costs incurred for work performed to-date bear to the estimated were identified and transaction prices were allocated relevant property development costs. to each performance obligation appropriately; OVERVIEW CORPORATE GOVERNANCE 172 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LAND & GENERAL BERHAD (Registration No. 196401000184 (5507-H)) (Incorporated in Malaysia)
Key Audit Matter (Cont’d)
Revenue Recognition - Group (Cont’d) Refer to Note 2(q) – Revenue and other income and Note 19 – Revenue The key audit matter How the matter was addressed in our audit As disclosed in Note 1(d) to the financial statements, the • selected sample of budgeted costs to completion and recognition of revenue is highly dependent on judgement obtained evidence that the costs were appropriately exercised by the management in assessing the completeness supported by contracts or letter of awards; and accuracy of estimated costs to complete, and the ability to deliver the properties within the contracted time. • performed re-computation to assess the percentage of completion and determined the accuracy of the We focused on this area as a key audit matter due to the degree revenue recognised; and of management judgement involved. Changes in judgements and the related estimates throughout a property development • assessed the completeness, accuracy and relevance life can result in material adjustments to revenue and profit of disclosures. margin. Impairment assessment of investment in subsidiaries and amount due from subsidiaries - Company Refer to Note 2(m)(ii) – Impairment of other assets and Note 5 – Investment in subsidiaries The key audit matter How the matter was addressed in our audit As disclosed in Note 5 to the financial statements, the Company’s We challenged the Company’s impairment indicators interests in subsidiaries is significant. assessment whether it has considered internal and external indicators. Identification of indicators of impairment on the Company’s interests in subsidiaries is a key audit matter because it is subjective and requires significant judgment.
Information Other than the Financial Statements and Auditors’ Report Thereon
The Directors of the Company are responsible for the other information. The other information comprises the information included in the Directors’ Report and Statement on Risk Management and Internal Control (but does not include the financial statements of the Group and of the Company and our auditors’ report thereon), which we obtained prior to the date of this auditors’ report, and the remaining parts of the annual report, which are expected to be made available to us after that date.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the remaining parts of the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the Directors of the Company and take appropriate actions in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 173 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LAND & GENERAL BERHAD (Registration No. 196401000184 (5507-H)) (Incorporated in Malaysia)
Responsibilities of the Directors for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the ability of the Group and of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Group and of the Company.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group or of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern. OVERVIEW CORPORATE GOVERNANCE 174 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LAND & GENERAL BERHAD (Registration No. 196401000184 (5507-H)) (Incorporated in Malaysia)
Auditors’ Responsibilities for the Audit of the Financial Statements (Cont’d)
• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors’ report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors are disclosed in note 5 to the financial statements.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
KPMG PLT Thong Foo Vung (LLP0010081-LCA & AF 0758) Approval Number: 02867/08/2022 J Chartered Accountants Chartered Accountant Petaling Jaya, Selangor
Date: 11 August 2021 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 175 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) LIST OF PROPERTIES AS AT 31 MARCH 2021
BUILT-UP/ NET AGE OF LETTABLE NET BOOK PURPOSE/ BUILDING LAND AREA AREA * VALUE LOCATION EXISTING AREA TENURE (YEARS) (HECTARES) (SQ FT) RM’000
1 HS(D) 59903, P.T. No. 16731 Land held for Leasehold - 7.99 - 242,895 The Mines Resort City, development land 43300 Seri Kembangan, expiring in Mukim and District of Petaling, 2091 Selangor
2 Aria Rimba, Section U10 Land held for Leasehold - 45.47 - 125,398 Mukim Bukit Raja, development land Daerah Petaling, Shah Alam expiring in Selangor 2115
3 331357, Lot No 125847 Section 2, Land held for Freehold - 1.71 - 70,128 Taman Sri Ukay, Ampang development (formerly Title No GRN 32548, Lot No 847) Town of Ulu Kelang, District of Gombak, Selangor
4 Lot 3, Presint 3, Town and District 13-storey Freehold 6 - 132,687* 57,897 of Putrajaya, State of Wilayah stratified office Persekutuan Putrajaya
5 43729, Lot 55348 Land held for Freehold - 0.72 - 53,138 Mukim of Batu, District of development Kuala Lumpur, Wilayah Persekutuan KL
6 Sekolah Sri Bestari, School land and Leasehold 22-24 6.07 135,677 51,072 Persiaran Margosa building land 2 136,798 Bandar Sri Damansara expiring in Kuala Lumpur 2110
7 Ladang Kerling Rubber and oil Freehold - 1,009.71 - 48,146 Mukim Kerling palm estate District of Ulu Selangor Selangor
8 Sena Parc Housing Land held for Freehold - 69.15 - 23,169 Development Project development Balance of development land in Mukim Ampangan and Pekan Sungai Gadut, District of Seremban, Negeri Sembilan OVERVIEW CORPORATE GOVERNANCE 176 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
LIST OF PROPERTIES AS AT 31 MARCH 2021
BUILT-UP/ NET AGE OF LETTABLE NET BOOK PURPOSE/ BUILDING LAND AREA AREA * VALUE LOCATION EXISTING AREA TENURE (YEARS) (HECTARES) (SQ FT) RM’000
9 Lot no.62539 PT 120097 Commercial Freehold 8 - 337,933 23,381 Jalan SD 12/5 units/ car park Sri Damansara / office
10 Lot Nos. PT 43125 & 20275 Land held for Freehold - 2.71 - 22,691 Mukim Dengkil development Sepang, Selangor
11 Bandar Sri Damansara Housing Land held for Freehold - 9.53 - 13,822 Development Project development Balance of development land in Mukim Sungai Buloh District of Petaling, Gombak, Selangor
12 Lot 2058 & 2059, Mukim Tebrau Land held for Freehold - 5.56 - 11,988 Daerah Johor Bahru development Johor Vacant industrial land
13 Lot 23304, Persiaran Perdana Land held for Freehold - 13.90 - 14,879 Bandar Sri Damansara development/ Kuala Lumpur Investment properties
14 Lot Nos.659,663,664 & 665 Land held for Freehold - 14.71 - 6,859 Mukim Sungai Petani development District of Kuala Muda Kedah OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 177 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) ANALYSIS OF SHAREHOLDINGS As at 30 July 2021
TYPE OF SHARES : ORDINARY SHARES TOTAL ISSUED SHARES : 2,973,135,003 ORDINARY SHARES
VOTING RIGHTS ON SHOW OF HANDS : ONE (1) VOTE FOR EVERY MEMBER OF THE COMPANY PRESENT IN PERSON OR BY PROXY ON A POLL : ONE (1) VOTE FOR EACH SHARE HELD
DISTRIBUTION OF SHAREHOLDINGS
NO. OF NO. OF % OF ISSUED SHAREHOLDERS SHARES SHARES CATEGORY
LESS THAN 100 269 8,608 NEGLIGIBLE 100 - 1,000 3,069 2,681,235 0.09 1,001 - 10,000 8,076 40,698,805 1.37 10,001 - 100,000 7,958 319,504,138 10.75 100,001 - LESS THAN 5% OF ISSUED SHARES 2,661 1,577,468,617 53.05 5% AND ABOVE OF ISSUED SHARES 1 1,032,773,600 34.74 TOTAL 22,034 2,973,135,003 100.00
SUBSTANTIAL SHAREHOLDER
NAME DIRECT INDIRECT NO. OF % NO. OF % SHARES SHARES
1) MAYLAND PARKVIEW SDN BHD 1,032,773,600 34.74 - - OVERVIEW CORPORATE GOVERNANCE 178 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
ANALYSIS OF SHAREHOLDINGS As at 30 July 2021
DIRECTORS’ INTEREST IN SHARES
A) LAND & GENERAL BERHAD
DIRECT INDIRECT NO. OF % NO. OF % NAME SHARES SHARES
1) DATO’ HJ ZAINAL ABIDIN BIN PUTIH - - - - 2) LOW GAY TECK - - - - 3) FERDAUS MAHMOOD - - - - 4) DATO’ IR DR A BAKAR JAAFAR - - - - 5) DATO’ HJ IKHWAN SALIM DATO’ HJ SUJAK - - - - 6) TENGKU MARUAN TENGKU ARIFF 2,000 NEGLIGIBLE - - 7) HOONG CHEONG THARD - - - - 8) CHIU ANDREW WAH WAI - - 1,032,773,600* 34.74* 9) DATO’ NOORIZAH HJ ABD HAMID - - - -
NOTE: * DEEMED INTEREST THROUGH MAYLAND PARKVIEW SDN BHD
B) RELATED CORPORATION OF LAND & GENERAL BERHAD
DIRECT INDIRECT NO. OF % NO. OF % NAME SHARES SHARES
1) FERDAUS MAHMOOD - - 45,000 30.00*
NOTE: * INDIRECT INTEREST IN BESTARI ELSA SDN BHD, A RELATED CORPORATION OF LAND & GENERAL BERHAD, VIA HARAPAN CIPTA SDN BHD OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 179 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) LIST OF TOP 30 SHAREHOLDERS AS AT 30 JULY 2021
NO. NAME HOLDINGS %
1 PUBLIC NOMINEES (ASING) SDN BHD 1,032,773,600 34.74 PLEDGED SECURITIES ACCOUNT FOR MAYLAND PARKVIEW SDN BHD (KLC)
2 LIM PEI TIAM @ LIAM AHAT KIAT 28,692,800 0.97
3 CHA AU PENG 20,700,000 0.70
4 TOH KIM CHONG 19,990,000 0.67
5 PUBLIC NOMINEES (TEMPATAN) SDN BHD 16,460,000 0.55 PLEDGED SECURITIES ACCOUNT FOR NIK AWANG @ WAN AZMI BIN WAN HAMZAH (E-KPG/JRL)
6 CGS-CIMB NOMINEES (ASING) SDN BHD 15,981,957 0.54 EXEMPT AN FOR CGS-CIMB SECURITIES (SINGAPORE) PTE. LTD. (RETAIL CLIENTS)
7 CITIGROUP NOMINEES (ASING) SDN BHD 13,569,120 0.46 CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT DIMENSIONS GROUP INC
8 CITIGROUP NOMINEES (ASING) SDN BHD 12,979,920 0.44 CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND
9 CHONG AH HIM @ CHONG KUM KWAN 12,157,600 0.41
10 MAH SIEW SEONG 11,526,050 0.39
11 HLB NOMINEES (TEMPATAN) SDN BHD 11,500,000 0.39 PLEDGED SECURITIES ACCOUNT FOR TAN CHANG JOON
12 MUHAMAD ALOYSIUS HENG 11,195,100 0.38
13 LIU & CHIA HOLDINGS SDN BHD 10,916,340 0.37
14 YONG HUA KONG 10,800,000 0.36
15 TEE BON PENG 10,537,000 0.35
16 HLB NOMINEES (TEMPATAN) SDN BHD 10,500,000 0.35 PLEDGED SECURITIES ACCOUNT FOR LIM PAY KAON
17 MENTA CONSTRUCTION SDN BHD 10,303,800 0.35
OVERVIEW CORPORATE GOVERNANCE 180 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
LIST OF TOP 30 SHAREHOLDERS AS AT 30 JULY 2021
NO. NAME HOLDINGS %
18 UOB KAY HIAN NOMINEES (ASING) SDN BHD 10,168,175 0.34 EXEMPT AN FOR UOB KAY HIAN PTE LTD ( A/C CLIENTS )
19 SOUTHERN REALTY RESOURCE SDN. BHD. 10,000,000 0.34
20 TEO KWEE HOCK 9,962,000 0.34
21 KENANGA NOMINEES (TEMPATAN) SDN BHD 7,920,000 0.27 RAKUTEN TRADE SDN BHD FOR EOW DICK YEN
22 LIU SIN 7,463,600 0.25
23 TAN SIOW BENG 7,023,180 0.24
24 KENANGA NOMINEES (TEMPATAN) SDN BHD 6,800,000 0.23 PLEDGED SECURITIES ACCOUNT FOR CHEONG CHEN YUE
25 CITIGROUP NOMINEES (ASING) SDN BHD 6,659,160 0.22 CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES
26 ONG NGOH ING @ ONG CHONG OON 6,600,000 0.22
27 CIMSEC NOMINEES (TEMPATAN) SDN BHD 6,500,000 0.22 CIMB FOR LEE KENG HONG (PB)
28 TAN KWE HEE 6,362,200 0.21
29 IBRAHIM BIN HAMZAH 6,231,200 0.21
30 CHOW SONG KUANG 6,140,000 0.21 OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 181 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H) NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Fifty-Eighth (58th) Annual General Meeting (“AGM”) of Land & General Berhad (“L&G” or “the Company”) will be conducted on a fully virtual basis for the purpose of considering and, if thought fit, passing, with or without modifications the resolutions setting out in this notice.
Day and Date : Wednesday, 15 September 2021 Time : 10.00 a.m. Meeting platform : https://meeting.boardroomlimited.my (Domain Registration No. with MYNIC - D6A357657) Mode of Communication : i. Pose questions to the Board via real time submission of typed texts at meeting platform during live streaming of the 58th AGM ii. Submit questions by logging into the Boardroom Smart Investor Portal at https://investor.boardroomlimited.com prior to the 58th AGM iii. Email questions to [email protected] no later than 11.00 a.m. on Friday, 10 September 2021 iv. Submit questions by completing the query form provided via facsimile or email no later than 11.00 am on Friday, 10 September 2021
Item Agenda 1. To receive and adopt the Audited Financial Statements for the financial year ended 31 Please refer March 2021 and the Reports of the Directors and Auditors thereon. Explanatory Note (i)
2. To declare and approve payment of a single tier final dividend of 0.5 sen per ordinary Ordinary Resolution 1 share in respect of the financial year ended 31 March 2021.
3. To approve the payment of Directors’ fees of RM504,000 in respect of the financial year Ordinary Resolution 2 ended 31 March 2021.
4. To approve Directors’ Meeting Allowances to Non-Executive Directors up to an amount Ordinary Resolution 3 of RM121,000 from 16 September 2021 until the next annual general meeting of the Company.
5. To re-elect the following Directors who retire pursuant to Clause 102 of the Constitution of the Company:
(a) Dato’ Hj Zainal Abidin Putih; Ordinary Resolution 4 (b) Dato’ Ir Dr A Bakar Jaafar; and Ordinary Resolution 5 (c) Dato’ Hj Ikhwan Salim Dato’ Hj Sujak Ordinary Resolution 6
6. To re-appoint Messrs KPMG PLT as Auditors of the Company and to authorise the Ordinary Resolution 7 Directors to fix their remuneration. OVERVIEW CORPORATE GOVERNANCE 182 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions:-
7. Continuing in Office as Independent Non-Executive Chairman Ordinary Resolution 8 - Dato’ Hj Zainal Abidin Putih
“THAT authority be and is hereby given to Dato’ Hj Zainal Abidin Putih who has served as an Independent Non-Executive Chairman of the Company for a cumulative term of more than nine years, to continue to serve as an Independent Non-Executive Chairman of the Company.”
8. Continuing in Office as Independent Non-Executive Director Ordinary Resolution 9 - Dato’ Ir Dr A Bakar Jaafar
“THAT authority be and is hereby given to Dato’ Ir Dr A Bakar Jaafar who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, to continue to serve as an Independent Non-Executive Director of the Company.”
9. Continuing in Office as Independent Non-Executive Director Ordinary Resolution 10 - Dato’ Hj Ikhwan Salim Dato’ Hj Sujak
“THAT authority be and is hereby given to Dato’ Hj Ikhwan Salim Dato’ Hj Sujak who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, to continue to serve as an Independent Non-Executive Director of the Company.”
10. Continuing in Office as Independent Non-Executive Director - Tengku Maruan Tengku Ariff Ordinary Resolution 11
“THAT authority be and is hereby given to Tengku Maruan Tengku Ariff who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, to continue to serve as an Independent Non-Executive Director of the Company.”
11. Authority to allot shares pursuant to Section 75 and 76 of the Companies Act, 2016 Ordinary Resolution 12
“THAT pursuant to Section 75 and 76 of the Companies Act, 2016 (“the Act”), the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next AGM and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that the aggregate number of shares to be allotted and issued does not exceed 10% of the total issued shares of the Company for the time being and that the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”), subject always to the approval of all relevant regulatory bodies being obtained for such issues.” OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 183 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
12. Proposed Share Buy-Back – Renewal of Authority Ordinary Resolution 13
“THAT subject to the Act, provisions of the Company’s Constitution, the Main Market Listing Requirements (“Listing Requirements”) of Bursa Securities and the approvals of all relevant regulatory authorities and parties, the Company be and is hereby authorised to purchase such number of ordinary shares in L&G on the Main Market of Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company, provided that:-
a) the aggregate number of ordinary shares in the Company purchased (“Purchased Share(s)”) and/or held as treasury shares pursuant to this ordinary resolution shall not exceed 10% of the total number of issued shares of the Company at any point in time; and
b) the maximum funds to be allocated by the Company for the Proposed Share Buy- Back shall not exceed the total retained earnings of the Company at the time of the purchase;
THAT upon purchase by the Company, the Board of Directors of L&G shall have the absolute discretion to decide whether such Purchased L&G Shares are to be cancelled and/or retained as treasury shares, or dealt with in such manner as provided under Section 127(7) of the Act;
THAT the authority to facilitate the Proposed Share Buy-Back will commence immediately upon passing of this ordinary resolution and will continue to be in force until -
a) the conclusion of the AGM of the Company at which time the authority shall lapse unless by an ordinary resolution passed at the AGM, the authority is renewed, either unconditionally or subject to conditions;
b) the expiration of the period within which the AGM of the Company is required by law to be held; or
c) revoked or varied by ordinary resolution passed by the shareholders in general meeting,
whichever occurs first, but not so as to prejudice the completion of the purchase(s) by the Company of the L&G Shares before the aforesaid expiry date and made in any event, in accordance with the provisions of the Act, rules and regulations made pursuant to the Act, the Listing Requirements and any requirements issued by any other relevant government and/or regulatory authorities;
AND THAT the Board be and is hereby authorised to take all such steps as are necessary or expedient to implement, finalise, complete or to give effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, variations and/or amendments in any manner as may be required by the relevant authorities and to deal with all matters relating thereto and to take all such steps and do all acts and things in any manner as they may deem necessary or expedient to implement, finalise and give full effect to the Proposed Share Buy-Back.” OVERVIEW CORPORATE GOVERNANCE 184 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
13. PROPOSED AMENDMENTS TO THE CONSTITUTION OF THE COMPANY SPECIAL RESOLUTION
“THAT the Company be and is hereby authorised to amend the Constitution of the Company as stated below.
(a) Under the subheading “General Meetings”, to delete the existing Clause 60 of the Constitution of the Company in its entirety, and to replace the provision with a new Clause 60 which reads as follows:-
“GENERAL MEETINGS
60. An Annual General Meeting shall (subject to any provisions of the Act relating to its first Annual General Meeting) be held once in every year (within a period of not more than fifteen months after holding of the last preceding Annual General Meeting). All other General Meetings shall be called Extraordinary General Meetings.
Every general meeting shall be held in such manner, at such time and place as the Directors may determine. General meetings may be held at more than (1) one venue using any technology or method that enables the members of the Company to participate and to exercise the members’ rights to speak and vote at the meeting.”
(b) To insert a new Clause numbered 130A under a new subheading “Signatures”, immediately after Clause 130 of the Constitution, which reads as follows:-
“SIGNATURES
130A. As far as permissible by laws and for the purpose of this Constitution, any document or instrument transmitted by any technology purporting to include a signature and/or electronic or digital signature of any of the following persons:-
a) a holder of any Securities in the Company; b) a director of the Company; c) an alternate director of the Company; d) an officer or any authorised person by the Directors of the Company; or e) in the case of a corporation, which is a holder of Securities in the Company, its director or secretary or a duly appointed attorney or duly authorised representative;
shall in the absence of expressed evidence to the contrary available to the person relying on such document or instrument at the relevant time, be deemed to be a document or instrument signed by such person, in the terms in which it is received.”.
AND THAT the Board be and is hereby authorised to take all such steps as are necessary or expedient to implement, finalise, complete or to give effect to the aforesaid proposed amendments to the Constitution of the Company.”.
14. To transact any other business for which due notice shall have been given in accordance with the Company’s Constitution and the Act. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 185 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
ANNUAL REPORT 2021 • LAND & GENERAL BERHAD 196401000184 (5507-H)
NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the 58th AGM of L&G, a single tier final dividend of 0.5 sen per ordinary share in respect of financial year ended 31 March 2021 will be payable to the shareholders of the Company on 18 October 2021. The entitlement date of the said dividend shall be 5 October 2021.
A depositor shall qualify for entitlement to the dividend only in respect of:
(a) shares transferred to the depositor’s securities account before 4.00 p.m. on 5 October 2021 in respect of transfers; and
(b) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.
By order of the Board
Lee Siw Yeng (MAICSA 7048942) SSM Practising Certificate No. 201908001160 Secretary
Kuala Lumpur 23 August 2021
NOTES:-
1. In view of the COVID-19 pandemic and with the primary concern for the safety of the Company’s shareholders, employees and Directors, the Board of Directors (“the Board”) and Management decided that the 58th AGM of the Company shall be conducted on a fully virtual basis. Please follow the procedures provided in the Administrative Guide for the 58th AGM in order to register, participate and vote remotely.
2. A member entitled to attend and vote at this Meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. A member shall be entitled to appoint not more than two proxies to attend and vote at the 58th AGM.
3. Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.
4. Where a Member appoints two proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.
Where an exempt authorised nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.
5. The instrument appointing a proxy in the case of an individual shall be signed by the appointer or his attorney, and in the case of a corporation either under its common seal or signed by its attorney or by an officer on behalf of the corporation. OVERVIEW CORPORATE GOVERNANCE 186 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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6. The Proxy Form, duly completed, must be deposited at the Registered Office of the Company at 8trium, Level 21 Menara 1, Jalan Cempaka SD12/5, Bandar Sri Damansara, 52200 Kuala Lumpur via post/courier/by hand or via email to lgbsec@land-general. com or via facsimile to Fax No. 603-6277 7061, or alternatively, the proxy appointment may also be lodged electronically at https://investor.boardroomlimited.com not less than forty-eight (48) hours before the time set for holding the Meeting or any adjournment thereof, or in the case of a poll, not less than twenty-four (24) hours i.e. Tuesday, 14 September 2021 before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid. (Important Note: Please refer Administrative Guide for the 58th AGM for details.)
7. Only members whose names appear in the Record of Depositors as at 8 September 2021 will be entitled to attend and vote at the meeting or appoint proxy (proxies) to attend and vote on their behalf.
EXPLANATORY NOTE ON THE AGENDA:-
(i) Item 1 of the Agenda – Audited Financial Statements for the financial year ended 31 March 2021
This agenda is laid before the 58th AGM pursuant to Section 340(1) of the Companies Act, 2016, and does not require a formal approval of the shareholders. As such, it is meant for discussion only and not put forward for voting.
(ii) Ordinary Resolution 2 - Payment of Directors’ fees
The directors’ fees for the financial year ended 31 March 2021 was RM504,000 (2020: RM489,917). The directors’ fees for the financial year ended 31 March 2021 is higher as compared to the preceding financial year due to higher number of directors’ circular resolutions signed by the Directors during the financial year. There was no change in fee and its structure since the preceding financial year. Please refer to the Corporate Governance Overview Statement for the components of the Directors’ remuneration.
(iii) Ordinary Resolution 3 – Meeting Allowances
The meeting allowance for each Non-Executive Director is RM1,000.00 per meeting attendance and the total estimated meeting allowances amounting to RM121,000.00 are calculated based on the estimated number of meetings for Board and Board Committees from 16 September 2021 until the next AGM in year 2022.
(iv) Ordinary Resolution 8 – Continuing in Office as Independent Non-Executive Chairman – Dato’ Hj Zainal Abidin Putih
The Nominating Committee has assessed the Independence of Dato’ Hj Zainal Abidin Putih, who has served as an Independent Non-Executive Chairman of the Company for a cumulative term of more than nine years, and recommended Dato’ Hj Zainal Abidin Putih to continue to serve as an Independent Non-Executive Chairman of the Company based on the following justifications:-
(a) he fulfills the criteria of an Independent Director pursuant to the Listing Requirements of Bursa Securities;
(b) he provides the Board a diverse set of experience, skill and expertise as he is a highly qualified person with diverse and in-depth work experience in different industries;
(c) he is familiar with the Company’s business operations and the property development market as he has been with the Company for more than 9 years and is aware of current issues confronting the Company and he continues to provide valuable input to steer the Company forward; and
(d) he has devoted sufficient time and attention to his professional obligations for informed and balanced decision making and he has not over-committed himself to other directorships, his personal affair or business. OVERVIEW CORPORATE GOVERNANCE PERFORMANCE DRIVEN FINANCIAL REPORT 187 SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
(v) Ordinary Resolution 9 – Continuing in Office as Independent Non-Executive Director – Dato’ Ir Dr A Bakar Jaafar
The Nominating Committee has assessed the Independence of Dato’ Ir Dr A Bakar Jaafar, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, and recommended Dato’ Ir Dr A Bakar Jaafar to continue to serve as an Independent Non-Executive Director of the Company based on the following justifications:-
(a) he fulfills the criteria of an Independent Director pursuant to the Listing Requirements of Bursa Securities;
(b) he provides the Board a diverse set of experience, skill and expertise as he is a highly qualified person who has been contributing to academic fields relating to science and technology as well as serving government agencies for many years;
(c) he is familiar with the Company’s business operations and the property development market as he has been with the Company for more than 9 years and is aware of current issues confronting the Company and he continues to provide valuable input to steer the Company forward; and
(d) he has devoted sufficient time and attention to his professional obligations for informed and balanced decision making and he has not over-committed himself to other directorships, his personal affair or business.
(vi) Ordinary Resolution 10 – Continuing in Office as Independent Non-Executive Director – Dato’ Hj Ikhwan Salim Dato’ Hj Sujak
The Nominating Committee has assessed the Independence of Dato’ Hj Ikhwan Salim Dato’ Hj Sujak, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, and recommended Dato’ Hj Ikhwan Salim Dato’ Hj Sujak to continue to serve as an Independent Non-Executive Director of the Company based on the following justifications:-
(a) he fulfills the criteria of an Independent Director pursuant to the Listing Requirements of Bursa Securities;
(b) he provides the Board a diverse set of experience, skill and expertise as he is highly experienced in financial and risk matters;
(c) he is familiar with the Company’s business operations and the property development market as he has been with the Company for more than 9 years and is aware of current issues confronting the Company and he continues to provide valuable input to steer the Company forward; and
(d) he has devoted sufficient time and attention to his professional obligations for informed and balanced decision making and he has not over-committed himself to other directorships, his personal affair or business.
(vii) Ordinary Resolution 11 – Continuing in Office as Independent Non-Executive Director – Tengku Maruan Tengku Ariff
The Nominating Committee has assessed the Independence of Tengku Maruan Tengku Ariff who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, and recommended Tengku Maruan Tengku Ariff to continue to serve as an Independent Non-Executive Director of the Company based on the following justifications:-
(a) he fulfills the criteria of an Independent Director pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad;
(b) he provides the Board a diverse set of experience, skill and expertise as he is a well-qualified person with diverse work experience in different industries; OVERVIEW CORPORATE GOVERNANCE 188 PERFORMANCE DRIVEN FINANCIAL REPORT SUSTAINABILITY STATEMENT ADDITIONAL INFORMATION
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NOTICE OF THE FIFTY-EIGHTH ANNUAL GENERAL MEETING
(c) he is familiar with the Company’s business operations and the property development market as he has been with the Company for more than 9 years and is aware of current issues confronting the Company and he continues to provide valuable input to steer the Company forward; and
(d) he has devoted sufficient time and attention to his professional obligations for informed and balanced decision making and he has not over-committed himself to other directorships, his personal affair or business.
(viii) Ordinary Resolution 12 - Authority to allot shares pursuant to Section 75 and 76 of the Companies Act, 2016
The proposed Ordinary Resolution 12, if passed, will empower the Directors to allot and issue ordinary shares of the Company up to an amount not exceeding 10% of the total issued shares of the Company for purpose of fund raising exercise including but not limited to further placement of shares for purpose of funding current and/or future projects, working capital, acquisition and/or for issuance of shares as settlement of purchase consideration. This authority unless revoked or varied at a general meeting will expire at the next AGM.
As at the date of this notice, there was no issuance of new ordinary shares by the Company pursuant to the mandate obtained at the 57th AGM held on 23 September 2020 and the Directors do not intend to utilise the mandate from the date of issuance of this Annual Report up to the expiry of the said mandate.
(ix) Ordinary Resolution 13 - Proposed Share Buy-Back – Renewal of Authority
This proposed Ordinary Resolution 13, if passed, will empower the Company to purchase and/or hold up to 10% of the issued and paid-up share capital of the Company. This authority unless revoked or varied by the Company at a general meeting will expire at the next AGM of the Company. Further information on the Proposed Share Buy-Back is set out in the Circular to Shareholders which is dispatched together with the notice of 58th AGM.
(x) Special Resolution - Proposed Amendments to the Constitution of the Company
The proposed Special Resolution is to seek shareholders’ approval for the proposed amendments to the Constitution of the Company. The Special Resolution, if approved, will facilitate clarity and administrative efficiency with the use of electronic means and technology.
Pursuant to Section 292 of the Companies Act, 2016, on a poll taken at a meeting, a special resolution means a resolution of which a notice of not less than twenty-one (21) days has been given and passed by members representing not less than seventy-five per centum of the total voting rights of the members who are entitled to vote and do vote in person or by proxy on the resolution. LAND & GENERAL BERHAD (Company No.: 196401000184 (5507-H)) (Incorporated in Malaysia) FORM OF PROXY
No. of Shares CDS Account No. Contact No.
I/We (FULL NAME IN BLOCK LETTERS AND NRIC NO./PASSPORT NO./COMPANY NO.) of (ADDRESS IN FULL)
being a member / members of LAND & GENERAL BERHAD hereby appoint
(FULL NAME IN BLOCK LETTERS AND NRIC NO./PASSPORT NO./COMPANY NO.) or failing him, the CHAIRMAN OF THE MEETING as my/our proxy/proxies to vote for me/us and on my/our behalf at the Fifty-Eighth (58th) Annual General Meeting of Land & General Berhad will be held on a fully virtual basis through live streaming at https://meeting. boardroomlimited.my (Domain Registration No. with MYNIC - D6A357657) on Wednesday, 15 September 2021 at 10.00 a.m. and at any adjournment thereof. My/our proxy/proxies shall vote as indicated below:-
Agenda Resolution For Against Declaration and payment of final dividend Ordinary Resolution 1 Payment of Directors’ fees Ordinary Resolution 2 Payment of Meeting Allowances Ordinary Resolution 3 Re-election of the following Directors pursuant to Clause 102 : (a) Dato’ Hj Zainal Abidin Putih Ordinary Resolution 4 (b) Dato’ Ir Dr A Bakar Jaafar Ordinary Resolution 5 (c) Dato’ Hj Ikhwan Salim Dato’ Hj Sujak Ordinary Resolution 6 Re-appointment of Auditors Ordinary Resolution 7 Continuing in office as Independent Non-Executive Chairman - Dato’ Hj Zainal Abidin Ordinary Resolution 8 Putih Continuing in office as Independent Non-Executive Director - Dato’ Ir Dr A Bakar Jaafar Ordinary Resolution 9 Continuing in office as Independent Non-Executive Director - Dato’ Hj Ikhwan Salim Ordinary Resolution 10 Dato’ Hj Sujak Continuing in office as Independent Non-Executive Director - YM Tengku Maruan Ordinary Resolution 11 Tengku Ariff Authority to allot shares pursuant to Section 75 & 76 of the Companies Act 2016 Ordinary Resolution 12 Proposed Share Buy-Back – Renewal of Authority Ordinary Resolution 13 Proposed Amendments to the Constitution of the Company Special Resolution (Please indicate with an “X” in the spaces provided how you wish your votes to be cast on the resolutions specified. If you do not do so, your proxy/proxies will vote or abstain from voting at his/her/their discretion.)
Signature : Date :
Notes:- Where an exempt authorised nominee appoints two (2) or more proxies, the proportion of 1. In view of the COVID-19 pandemic and with the primary concern for the safety of the Company’s shareholdings to be represented by each proxy must be specified in the instrument appointing shareholders, employees and Directors, the Board of Directors (“the Board”) and Management the proxies. decided that the 58th AGM of the Company shall be conducted on a fully virtual basis. Please 5. The instrument appointing a proxy in the case of an individual shall be signed by the appointer follow the procedures provided in the Administrative Guide for the 58th AGM in order to register, or his attorney, and in the case of a corporation either under its common seal or signed by its participate and vote remotely. attorney or by an officer on behalf of the corporation. 2. A member entitled to attend and vote at this Meeting is entitled to appoint a proxy or proxies to 6. The Proxy Form, duly completed, must be deposited at the Registered Office of the Company attend and vote in his stead. A proxy need not be a member of the Company. There shall be no at 8trium, Level 21 Menara 1, Jalan Cempaka SD12/5, Bandar Sri Damansara, 52200 Kuala restriction as to the qualification of the proxy. A member shall be entitled to appoint not more Lumpur via post/courier/by hand or via email to [email protected] or via facsimile than two proxies to attend and vote at the 58th AGM. to Fax No. 603-6277 7061, or alternatively, the proxy appointment may also be lodged 3. Where a Member of the Company is an exempt authorised nominee which holds ordinary electronically at https://investor.boardroomlimited.com not less than forty-eight (48) hours shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus before the time set for holding the Meeting or any adjournment thereof, or in the case of a account”), there is no limit to the number of proxies which the exempt authorised nominee may poll, not less than twenty-four (24) hours i.e. Tuesday, 14 September 2021, before the time appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to appointed for the taking of the poll, and in default the instrument of proxy shall not be treated th an authorised nominee defined under the SICDA which is exempted from compliance with the as valid. (Important Note: Please refer Administrative Guide for the 58 AGM for details.) provisions of subsection 25A(1) of SICDA. 7. Only members whose names appear in the Record of Depositors as at 8 September 2021 will be 4. Where a Member appoints two proxies, the proportion of shareholdings to be represented by entitled to attend and vote at the meeting or appoint proxy (proxies) to attend and vote on their each proxy must be specified in the instrument appointing the proxies. behalf. Fold here
STAMP
The Secretary LAND & GENERAL BERHAD (196401000184 (5507-H)) 8TRIUM LEVEL 21 MENARA 1 JALAN CEMPAKA SD 12/5 BANDAR SRI DAMANSARA 52200 KUALA LUMPUR MALAYSIA
Fold here www.land-general.com
LAND & GENERAL BERHAD (196401000184 (5507-H))
8trium, Level 21 Menara 1 Jalan Cempaka SD 12/5 Bandar Sri Damansara 52200 Kuala Lumpur Malaysia
T : +603 6279 8000 F : +603 6277 7061 E : [email protected]